The Napier-Wairoa rail line is set to reopen, with an agreement between KiwiRail and Napier Port being signed today.
Napier Port is offering a freight service to log exporters starting in the final quarter of next year, with the final go-ahead subject to KiwiRail's charge for making the track fully operational.
The Napier-Gisborne line was mothballed in 2012 after damage to the track north of Wairoa and declining revenues.
KiwiRail chief executive Peter Reidy said reopening the track would boost business growth in the region.
"We had always signalled that the line could reopen in the future, as long as there was sufficient freight volume available to support rail operations and the necessary investment in infrastructure was made."
Sufficient freight volume is thanks to what many describe as a "wall of wood" on the East Coast, thanks to a planting frenzy in the 1990s when log prices spiked. Harvest volumes have been estimated to nearly double for a decade.
Hawke's Bay regional councillor and chair of the Hawke's Bay Regional Transport Committee, Alan Dick, said the annoucement was "the best Hawke's Bay good news story for a very long time".
He said financial support from regional council and was "essential" to the commercial arrangement.
"Whatever the cost, the justification is clear and two fold - safety from avoidance of heavy traffic congestion on SH 2, as the massive new log harvests start from next year and, economic development opportunities and options for Wairoa and the northern part of our region," Mr Dick said.
Napier Port CEO Garth Cowie said it was vital the region had the ability to transport logs "in a reliable, efficient and environmentally friendly manner".
The Wairoa log service will initially run over the weekend, with two trains each Saturday and Sunday. Napier Port already has log-only weekday trains from Whanganui, Palmerston North and Woodville.
"Napier Port is a critical gateway for the central North Island and ensuring that we have the right transport links in place is a crucial factor in moving East Coast export products to world markets."
Hawke's Bay Regional Council's interim chief executive Liz Lambert said community feedback for reinstating the rail line was regularly received.
"It makes perfect sense to see this arrangement sit commercially between Napier Port and KiwiRail," she said.
Mr Cowie said there was already a suitable staging area in Wairoa and the plan was for exporters to engage one of the Napier Port marshalling companies to load the logs.
Trains would run weekends until the concept was proven.
"Obviously the agreement does provide the opportunity to extend that in the future if it is going well."
Non-log freight was a possibility for the future "but we are not anticipating that".
It was not a competitive challenge to Gisborne's port "because this is predominantly new volume".
"Having rail as one of the infrastructure options will enhance the overall East Coast volumes.
"We are delighted to be in a position to re-establish a significant transport link to Wairoa and hopefully we will see significant volume come off the road."
Forest Management NZ manages more than 11,000 ha in the Wairoa District.
Forest Manager and joint CEO Steve Bell said he was "delighted at the news" which presented "greater options".
Napier Port is one of the largest international ports in central New Zealand. It processed more than 4 million tonnes of cargo in 2015 and volumes keep growing, necessitating a planned new wharf that can accommodate larger ships.