The Government and Auckland Council have today signed off terms of reference setting out how central and local government will work together to develop the city's transport system.
Finance Minister Bill English said more than 700,000 additional people were expected to live in Auckland by 2045.
"Long-term solutions for Auckland's transport system are central to ensuring it remains a great place to live and do business, and it is also important for the economy as a whole."
"This population growth means Auckland will need another 400,000 houses over this timeframe - and transport infrastructure is key to delivering this."
Transport Minister Simon Bridges said that together the Government and Council planned to invest $4.2 billion in Auckland's transport system over the next three years.
"While that work will continue as agreed on the roads, public transport, walkways and cycleways, we are now turning our focus to the next three decades and beyond.
"The Government and Council broadly agree on the priorities for the transport system, and we are particularly focussed on addressing congestion and increasing public transport use," he said.
The terms of reference set out a structure under which officials from the Ministry of Transport, Auckland Council, Auckland Transport, the NZ Transport Agency, Treasury and the State Services Commission would work together to test alternative options for how the transport system could develop.
A preferred approach was expected to be presented by officials in about one year.
"The Government and Council will then consider the preferred approach and how it may be delivered, including whether changes might be needed to legislation and funding arrangements," Mr Bridges said.
The Automobile Association, Auckland Business Forum and Employers and Manufacturers Association (EMA) welcomed progress on the joint transport project.
Auckland Business Forum chairman Michael Barnett said he hoped it put an end to Auckland-Wellington feuding on the city's transport priorities.
EMA chief exeuctive Kim Campbell said the city was struggling to cope with growth, 7000 new cars were being registered every month and there was a compelling case for further spending on transport.
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"We want to see funding streams and timeframes for moving these vital projects along," Mr Campbell said.
Labour's Auckland issues spokesman Phil Goff said the decision to align central and local government policy should have been taken years ago, avoiding what will now be a further 12-month delay.