The light rail line from Circular Quay to Sydney's eastern suburbs is likely to open for services in early 2019, after the $2.1 billion contract for the project was signed on Wednesday night.
The cost of the project is a $500 million increase over the previously announced $1.6 billion price tag, but less than the $2.2 billion reported recently.
The contract also includes provisions for major works to finish within 2018, meaning major disruptions in the city and suburbs will take just over three years, starting in late April 2015.
Services will be tested before opening to passengers in early 2019. The light rail line will run down George Street, through Surry Hills to Randwick and Kingsford.
Late changes nominated to the project include increasing the size of the vehicles from 45 metres to 67 metres, meaning the line will also have a larger capacity than first planned.
In a statement on Wednesday night, Transport Minister Gladys Berejiklian said: "This project will provide a significant improvement in public transport in Sydney, as well as creating more than 10,000 jobs for our economy."
"Customers will have brand new clean, modern, reliable and efficient services from Circular Quay, through the CBD, to major event venues at Moore Park and on to the south east's major residential areas and educational and medical facilities," she said.
"This is the best option to tackle congestion in the CBD and south east of Sydney."
"We will continue to work closely with the community to fine-tune the detailed week by week program for construction, and regular one-on-one meetings and community and business forums are already underway along the light rail route.
