A former coalmine site in Lake Macquarie is set to become a train factory where the next generation of NSW passenger trains will be built.
NSW Premier Chris Minns pledged $12 billion to revive local train manufacturing capability in July, earmarking two sites near Newcastle for the state-owned facility.
On Tuesday, the government announced a former mine site at Teralba, owned by Macquarie Coal, as the preferred location, chosen over the Broadmeadow locomotive depot in Newcastle.
In a statement, the government said the location was selected after a preliminary assessment of both sites found Teralba was "a larger and more flexible site that could accommodate train manufacturing, assembly, commissioning and on-site dynamic testing" with capacity for future expansion.
It said the location also provided an opportunity to transform former mining land into a major "manufacturing and employment hub".
The facility is part of the government's $12 billion Future Fleet Program to rebuild train manufacturing capability in the Hunter. (Supplied: NSW government)
The development, funded under the Future Fleet Program, is expected to support up to 780 jobs during construction and about 550 ongoing jobs across the facility and supply chains.
Taps into region's skills
Business Hunter chief executive Bob Hawes said the announcement was "fantastic" news for the region.
"This is the sort of industry development that we want to see in this region," he said.
"It digs into a deep vein of experience and opportunity that the region knows it can deliver on, with our skills and workforce here as well as the developed industries that already exist that can service and operate in this environment."
The Hunter has a long history of rail manufacturing, with Newcastle firm Goninan, founded in 1899, building the Tangara trains at Broadmeadow in the late 1980s and 1990s, and the Millennium fleet later built at Cardiff.
The facility will manufacture the Tangara replacement fleet. (ABC News: Declan Bowring)
Mr Minns said the project would build on the state's manufacturing capacity.
"For more than a century, workers in the Hunter proudly built the trains that carried millions of people around Sydney," Mr Minns said in a statement.
"Then those jobs were sent overseas. We're bringing them back, because we believe NSW should build more of the things we need right here at home."
The Lake Macquarie facility will host the next 30 years of train manufacturing in NSW, starting with the new Tangara replacement fleet before future replacement programs for the Millennium and OSCAR fleets in the 2040s and the Waratah fleet in the 2050s.
The government said it would progress detailed site investigations and due diligence with Glencore, which part-owns Macquarie Coal, to enable further site planning, design and procurement work to start.
The timeline for the facility's completion has not been finalised.
It said Broadmeadow remained an alternative option at this stage, while detailed investigations, due diligence and acquisition activities continued at Teralba.