Aucklanders could yet pay tolls to fund the $2.5 billion City Rail Link, but the Government remains lukewarm about the idea.
Prime Minister John Key outlined a plan to make an early start on main works for the rail link at his State of the Nation address today in Auckland.
Strong growth in rail patronage and the need to provide certainty for other CBD developments were behind the decision.
"The reality is the central rail link is going ahead," Mr Key said.
The Prime Minister firmed up the Government's commitment to the project and pledged the taxpayer would pay about half the total cost.
He said the Government had not ruled out allowing the council to toll motorists to help fund its share of the project.
"If council wants to further tax or charge Aucklanders we are lukewarm to that because in the end it reduces the available disposable income of Aucklanders and makes Auckland as a place to do business a little more expensive," Mr Key said.
"We haven't ruled those things out but we have said they would absolutely need to justify them."
Last year, a small majority of Aucklanders supported tolls to fund transport projects during consultation on a long-term budget, but the Government blocked the idea, which requires legislation.
Mr Key said the council had to go through its processes to work out how to come up with its share; how much it will fund through rates, debt and how it manages its balance sheet. Asset sales are one option.
A contract between the Government and council is being negotiated setting out how project costs will be shared, timing of payments and how the rail link will be owned and managed.
Mayor Len Brown described Government's announcement to firm up its commitment and formalise a funding commitment from 2020 as a "great day for Auckland".
Rail patronage, Mr Brown said, was growing at 9000 extra train trips a day. Britomart, which can handle 20 trains an hour, will become a through station handling 48 trains an hour.
The announcement will allow construction of the main underground tunnelling work to begin at the Mount Eden end in 2018. In May this year, work will begin on a cut and cover tunnel from Britomart and up Albert St as far as Wyndham St. The project is due for completion in 2023.
Mr Brown said Aucklanders had a big discussion last year about tolls and it was important to keep the discussion live.