"The harvest profile for Wairarapa growth is 50 per cent or more over the next 10 years.
"The site will handle more logs from Wairarapa, more rail services, and relay more logs -- all around the forthcoming growth," he said. "This will reduce the need for trucks to accommodate the growth.
"The hub will enable us to connect the world to the Wairarapa region, through a reliable and cost-effective transport connection based upon rail."
The development will be a partnership between CentrePort, forestry exporters and KiwiRail, with local companies Forest Enterprises and Farman Turkington as the anchor users of the hub.
Business partner John Turkington said the port's commitment "gives us the confidence to expand our operations and increase our exports".
Steve Wilton, managing director of Forest Enterprises said, "CentrePort's investment will provide an efficient, secure and long term logistics channel to the port.
"This development is vital to our company's ability to successfully harvest and market our investors' forests in the Wairarapa and is complementary to our recent long-term lease commitment for log storage space at CentrePort in Wellington."
Rail advocate Kevin Fearon, Masterton, former owner of Fearon Logging, said rail is "absolutely the way to go.
"It's obvious, getting the trucks off the bloody road.
"They're not blocking up the road, not wasting fuel, buggering up the roads, holding the traffic up.
"The infrastructure is there, it's a huge cost saving, a no-brainer.
"To be utilising the rail is brilliant -- it should have been done year ago."
Forestry contributes an annual gross income of about $5 billion, 3 per cent of New Zealand's GDP, and directly employs around 20,000 people.