The Australian government has earmarked A$232.1m ($235.9m) in the 2012-13 Budget to improve a bottleneck through Adelaide's Torrens and Goodwood Junctions.
The entire project is expected to cost A$443m ($450m), which will be supplemented by the South Australian government. Planning on the project is currently undergoing, with work expected to start early as next year.
Improvements to the section will speed up the movement of freight trains through Adelaide, better passenger service reliability, as well as decrease traffic congestion.
The Torrens and Goodwood Junctions upgrade will separate freight line from passenger track, which will allow two trains to run smoothly, without requiring one to stop on the track while other is passing through.
Construction underpasses will allow 1800m-long trains to run along the line between Melbourne, Adelaide and Perth, instead of the current 1500m trains, while removal of the bottleneck will cut 30 minutes of the journey time along the line.
As part of the project, the level crossing on Leader Street in Goodwood and three other level crossings near Bowden Station will be removed.
The project also involves improvements to Keswick and Bowden stations, and work on pedestrian access between the Adelaide Showgrounds and Parklands.
Around 4,000 freight trains pass through the line every year and, after improvement, the number of trains is expected to increase further.
The investment will complement the A$350m ($355.8m) that the Australian government has committed to upgrade the rail corridor.