The Australian Government has announced that the Australian Rail Track Corporation will receive $44.7 million to upgrade 35 kilometres of the Narrabri to Turrawan Line between the Hunter Valley Coal Network and Inland Rail.

Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack said the project would significantly enhance the quality and capacity of the critical rail connection, providing a better and more consistent service between northern New South Wales, the Inland Rail project and the Port of Newcastle.

"Narrabri to Turrawan is an essential link along this network and this upgrade will allow longer and heavier freight trains travelling from Northern NSW - transporting grain and cotton - to access the Newcastle and Sydney Ports," he said.

"This upgrade will allow greater volumes of freight moved on each train reducing transport costs and enhancing competitiveness for Australian exports.

"We'll achieve this by replacing the existing steel and timber sleepers with heavy-duty concrete ones, delivering vital level crossing upgrades and improving the rail quality on the Narrabri Coal Junction to Turrawan, as well as the Turrawan to Narrabri North section.

"Our strong investments in region-defining rail projects like this are all about getting our farmers' world-leading food and fibre to market."

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Minister for Regional Health, Regional Communications and Local Government and Federal Member for Parkes, Mark Coulton said the project will provide a welcome productivity boost for the region's supply chain, at a time when local industries are going from strength to strength.

"The 35-kilometre upgrade of the Narrabri to Turrawan Line is welcome news for the local farming community and other businesses using the rail line to get their products to market, with the new load specifications directly compatible with Inland Rail," Minister Coulton said.

Minister Coulton said the upgrade would maximise the benefits from Inland Rail for the region, particularly businesses relying on the Hunter Valley Coal Network and Newcastle and Sydney ports.

"This will mean trains currently unable to travel on this section between northern NSW and Newcastle port will soon be able to traverse the track, allowing greater freight volumes to travel to Newcastle and Sydney ports - where the majority of grain and cotton from this region is exported.

"We are seeing decades of planning and investment by the Australian Government coming together to support regional economies, including those in the Parkes electorate, and create the environment for our communities to grow and prosper well into the future."

Minister Coulton said the project will deliver an improved corridor capable of 25 Tonne Axle Load (TAL) trains going at 80 km/h to replace the current ageing, 20.5 TAL track.