Chief Minister Andrew Barr said the June budget would set aside $3.5 million for "detailed design work" even though a final decision has not yet been reached on the chosen corridor for the light rail's second stage.

"While planning and approvals continue, we are doing what we can now to deliver this project as soon as possible," Mr Barr said.

Construction funding for the interchange will be allocated in future budgets.

The design work will include travellers' shelters, modern passenger information displays and ticketing machines, accessible footpaths and cycle facilities, and security systems.

The design work would link the preferred light rail terminus on Callam St with the existing bus interchange.