The NSW government has committed $1 million to investigate a proposal to link Canberra and the Port of Eden by rail, opening up a "global gateway" for trade and tourists.
The announcement of a feasibility study follows last month's release of a concept plan developed by engineer Edwin Michell on behalf of the Cooma and Monaro Progress Association.
Mr Michell's plan proposes to rebuild and reopen the disused rail line between Queanbeyan and Bombala, extending it north to include a stop at Canberra Airport.
It would also head south from Bombala to Eden, with three potential routes identified.
Trains on the proposed line would transport freight between Canberra Airport and the Port of Eden, opening up import and export opportunities, as well as passengers.
A preliminary cost estimate released by the Cooma and Monaro Progress Association on Thursday puts the total project spend between $2.54 billion and $2.95 billion.
NSW Premier Gladys Berejiklian, Deputy Premier John Barilaro and Transport Minister Andrew Constance announced the $1 million in funding for the study in Cooma on Wednesday.
Mr Constance said the study would finalise a preferred route and cost estimates.
He said the idea demonstrated a vision for "a borderless region" in south-east Australia.
"By linking the line to the Port of Eden, the project has the potential to connect Queanbeyan and Canberra to the coast, at a location that experts say rivals Sydney Harbour for depth and access," Mr Constance said.
The transport minister described Eden and its "under-utilised" port as "the hidden gem" in the region.
Ms Berejiklian rejected suggestions that the funding, which will come from the NSW government's $4.2 billion sale of its share in the Snowy Hydro Company to the Commonwealth, was a waste of taxpayers' money.
“We are committed to opening up the regions but we can’t do that unless we can move people, goods and services throughout our regions," Ms Berejiklian said.
"... The opportunities for us now are once-in-a-generation, and we intend to use every opportunity we have."
Mr Barilaro echoed those thoughts, comparing the idea to the "visionary" Snowy Hydro scheme.
The proposal has previously received the backing of Snowy Monaro Regional Council Mayor John Rooney, while ACT Chief Minister Andrew Barr has said his government is "always interested in improving transport in and out of Canberra".
The ACT and NSW Labor parties have previously promised to commit $5 million each for a study into reducing the four-hour train journey time between Canberra and Sydney, if NSW Labor wins the state election in March.