Chief Minister Andrew Barr says more work is needed to speed up the trip between Sydney and Canberra, despite NSW moving to replace its ageing regional fleet.
The NSW government will soon call for tenders to replace its decades-old XPT, XPLORER and Endeavour-class sets.
Mr Barr said it was "pleasing" to see NSW invest in new rolling stock.
He recently took the four-hour trip from Canberra to Sydney to meet with NSW transport minister Andrew Constance and make the case for a faster rail link between the cities.
"This is a good start. I understand that they are open to considering tilt trains such as Talgo's. This is also encouraging," Mr Barr said.
"In addition to new trains, upgrade work will also be needed on the track - especially in the southern highlands."
Talgo executives came to Canberra in April with a proposal to cut the travel time for the Canberra-Sydney train trip in half.
Their full proposal would cost less than $100 million, commercial director Guillermo Martinez said, with Talgo understood to be seeking contributions from governments in New South Wales and the ACT.
NSW MP and Member for Goulburn Pru Goward said the contract would be awarded in early 2019.
She said the new trains will be operated by NSW TrainLink, the NSW Government-owned regional rail and coach service provider.
"The older trains are nearing the end of their days, I am well aware of their unreliability," Ms Goward said.
In May, Mr Barr said the ACT would work with NSW to lobby for federal funding to put together a business case for better rail connectivity.
While he acknowledged the ACT's contribution to any rail line would be small, he said the territory government could improve the infrastructure on the Canberra side and help with a procurement decision on rolling stock.