The business case for a passenger rail start-up trial from Hamilton to Auckland has been approved by the NZ Transport Agency.
Transport Minister Phil Twyford said it was an "exciting step" towards the planned rollout of a five-year trial service to begin in March 2020.
"We know more and more people are commuting between Hamilton and Auckland, and introducing this trial service will give them a choice in how they do that," Twyford said.
The business case allows for the fit-out of rolling stock and design of infrastructure.
The five-year trial was estimated to cost $78.2 million, including $68.4m from the NZTA and $9.8m from local authorities.