The Government has proposed contributing an estimated $3.8 billion over 30 years to fix the capital's transport woes.

It's 60 per cent of a total $6.4b expected cost for Let's Get Wellington Moving (LGWM), the long-awaited project to address congestion problems in the city.

Residents will still be waiting for some time, though - big-ticket items in the plan will still take the better part of the first decade to get running.

The project includes an extra Mt Victoria tunnel, but Transport Minister Phil Twyford said rapid transit would be prioritised.

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What type of rapid transit would be used is still to be decided, but options include light rail, trackless trams, or a rapid bus service.

Twyford said it would realistically be a few years before physical work on the service began, and construction would take another several years.

The plan is to provide rapid transit with high-frequency services, running every 10 minutes or less, which allows fast and level boarding, and has dedicated lanes with signal priority. Such a service could run through the city from the train station, and is estimated to cost $2.2b.

The rapid transit would extend to Newtown and the airport.

Also included in the proposal is a dual public transport spine through the central city on the golden mile and waterfront quays, rail network improvements, and bus priority on Thorndon Quay and Hutt Rd.

Transport Minister Phil Twyford said the Government's contribution would come out of the National Land Transport Fund, and the funding would be spread over two decades.

The other 40 per cent would come from Wellington City Council and Greater Wellington Regional Council.

Without further investment in the city's transport system, it's estimated travel times by car and public transport could be up to 25 per cent longer by 2026 and the cost of congestion to the economy up as much as 50 per cent.

More than 2000 people and 50 stakeholder groups took part in consultation for LGWM.

The next step will be for the councils to formally endorse the indicative package. Business cases will need to be developed and put forward.

Some of the smaller changes will happen first, including a number of walking, cycling, public transport and safety improvements.

Wellington mayor Justin Lester said removing cars from the golden mile was part of LGWM, to increase the walkability of the city.

He said the council would look at funding the project through network user charges, carpark levies, general rates increases of 1-1.3 per cent per annum over 12 years, and value capture options.

Traffic congestion State Highway 1 urban motorway southbound near the Terrace Tunnel, Wellington. Photo / Mark Mitchell
Traffic congestion State Highway 1 urban motorway southbound near the Terrace Tunnel, Wellington. Photo / Mark Mitchell

Value capture financing would be when the council seeks to capture some of the future benefits from increased land values that would come from investment into transport in the area.

Twyford said Wellington was being given the 21st-century transport system it deserved.

"Wellington is only getting its fair share of funding," he said.

The estimated contribution is supposed to allow for other large projects happening outside of LGWM, such as Transmission Gully.

Lester said the project was "future focused" and would "shape our city for the next 50 years to come".

Twyford said the rapid transit would be "the big game changer here".

"We are going to start work straight away once the councils have given their formal consent."

The work on the extra tunnel was expected to begin towards the end of the first 10 years.

Funding has not been approved for an extra Terrace Tunnel or the Inner City Bypass.

"We settled on the amount of money that we think could be prudently funded and financed by and, for Wellington, it's a limited envelope of funds," Twyford said.

"We had to draw the line somewhere."

The focus was on "driving change" by reducing car dependency, chronic congestion and offering people genuine transport alternatives.

Lester said the councils shouldn't look a gift horse in the mouth.

"We would be crazy to turn this down," he said.

After the announcement, councillor Chris Calvi-Freeman said the project would be "transformative".

"At last we have broken the deadlock on the ill-fated flyover scheme at the Basin Reserve," he said.

"In an ideal world there would be more and it would be faster, but we have to be realistic."

Councillor Iona Pannett said the plan was a "victory for the climate and for our children".

"They're going to have a future," she said.

"I will certainly continue to oppose more roading, it is not the way the city needs to go."

AA general manager of motoring affairs Mike Noon said he didn't want to see motorists pushed into using a public transport system that wasn't good enough, and hoped for their sake the transport options rolled out would be adequate.

"This is the beginning of the beginning, basically. There is an enormous amount of work to do."

An overhaul of Wellington's bus network last year caused public outcry, with customer complaints peaking at 11 times the usual level.

One frustrated commuter referred to it as a "lasagne of failure", and the phrase "ghost bus" became commonly used in the capital.