Premier Chris Minns said the pledge was the "largest investment in rail infrastructure in generations" for the region. The work would involve installing extra tracks and passing loops on the mostly single-track section between Wollongong and Kiama, and doubling the two rail tracks between Hurstville and Sutherland in Sydney to four, to separate the T4 Illawarra and South Coast lines.
Construction is not expected to be completed until the mid- to late 2030s, with detailed planning to start next year. An immediate $621 million would be spent on upgrading signalling and raising sections of track ahead of electrification and duplication.
The pledge comes days after the government backflipped on a shake-up to Sydney's rail timetable following a backlash from commuters. The T4 and South Coast lines together carry about 250,000 passengers a day, a quarter of Sydney Trains' patronage.
Minns criticised the former Liberal government for focusing on Sydney metro projects while regional lines fell into disrepair. "For too long, the Liberals only funded Sydney metros, while regional communities missed out," he said.
The government also faces a political challenge from One Nation in the South Coast, where Labor holds all seats from Bega to Wollongong after a 2025 byelection win in Kiama. Minns said he was concerned about the "threat" from voters considering One Nation for the first time.
Separately, the government has pledged $12 billion to build a train manufacturing plant at Teralba in Lake Macquarie to replace the ageing Tangara fleet used on the T4 line.