A new High Speed Rail Authority to be formed next month has been allocated $13.58 million across three years to plan a Newcastle and Sydney connection.
The federal government reaffirmed the section between the two cities was the top priority for high speed rail in Tuesday's budget.
A high-speed network could allow train travel at speeds of more than 250 km/h and is designed to cut travel time from Newcastle to the state's capital to less than an hour.
The budget allocation of $13.58 million includes $5.42 million in 2023-24. It comes after a $500 million commitment from the federal government in 2022 for planning and corridor acquisition between Newcastle and Sydney.
The funding will go to a High Speed Rail Authority that will be established as an independent body on June 13. The body will comprise a five-member board and employ 13 staff in the coming financial year.
The authority was a government election commitment, and Labor said last year it would "provide independent and impartial advice on the policy and standards of high speed rail; and plan, identify and secure corridors".
The budget estimated a $4.45 million spend on high-speed rail for 2022-23, but the papers said the actual spend for the year would "likely be significantly lower". The figure will be revised by the new authority once it is established.
No further money has been set out beyond 2025-26, with ongoing funding from 2026-27 "subject to future government considerations".
Hunter business leaders have expressed doubts over whether high-speed rail will ever become a reality. The concept has been debated for decades by both sides of government and would cost tens of billions of dollars.
The Albanese government declared the long held vision for high-speed rail was "becoming a reality" after parliament passed the High Speed Rail Authority Bill 2022 in November. The bill allowed for the formation of the statutory authority.
Committee for the Hunter CEO Alice Thompson said before Tuesday's budget that she wanted to see more commitment to faster rail between Sydney and Newcastle in the near future and high-speed rail in the longer term.
Government business cases identified high-speed rail as one of three options between Sydney and Newcastle, alongside faster and fast corridors.
The High Speed Rail Authority will absorb the existing National Faster Rail Agency, established in 2019.
The NSW and federal governments have committed $500 million each towards track and station upgrades between Wyong and Tuggerah to enable fast rail in the future.
The previous Liberal state government said it was "working towards delivering a fast rail network by 2056".
