Work is expected to begin "almost immediately" on the extension of the Joondalup train line to Butler, following the signing of a major contract for the project.

Transport Minister Troy Buswell today revealed the Perth office of Ansaldo STS Australia last week signed a $19.7 million contract with the Public Transport Authority, which allowed work on the project to start.

"The contract covers the detailed design and construction of the railway signalling system for the $240 million Butler Extension Project," Mr Buswell said.

"The signalling system will enable the safe and efficient operation of the railway by keeping a safe separation between trains, monitoring route integrity and supervising train braking and speed limits."

Work will be done between the existing Clarkson Station and the new Butler Station on the Joondalup Line and also involves signalling work at the entry to the Mandurah Railcar Depot.

Factory assembly and testing works will be done at Ansaldo STS Australia's Canning Vale premises and is expected to be completed in time for Butler services to start in late 2014.