Tamworth MP Kevin Anderson, one of the development's biggest supporters, announced on Tuesday that ground had been broken at the project - at last.

"This project's had more starts than Phar Lap," he said.

"It's absolutely great to see this project is now underway, let's get on with it."

Set to link the Taminda industrial suburb with Sydney's Port Botany by rail, the project was announced and granted $7.4 million in funding by the state government in late 2017.

Initially scheduled to be done in 2018, the rail project has been repeatedly stalled.

Mr Anderson said today that construction is now slated to be completed by the second half of 2021.

"It's been a very difficult project," he said.

"It all seemed pretty simple at the start and something that everybody was on board on, and then as the project started to progress the detail got more detailed in terms of what did it look like, how did it work."

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In the meantime, Crawfords Freightlines planned, designed and completed an intermodal hub at Werris Creek in just six months, aided by the Liverpool Plains Shire Council.

But the Tamworth MP said the two intermodal projects, just 50km apart, would work together.

"I think there's plenty of scope for the intermodal here in Tamworth to work in conjunction with the intermodal at Werris Creek; two completely different projects."

Regional Director for Transport for NSW Anna Zycki said the hub would draw business into Tamworth, but said the exact freight transported would depend on operator Qube.

"This is all about facilitating freight services in the area and being able to provide the opportunities for longer-term employment in Tamworth around the freight industry," she said.

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Mr Anderson said "a number of different companies" have been talking to Qube about using the line.

The project will involve rebuilding about 6km of track along the disused Barraba line, linking both the freight hub and an industrial business park to be owned by Tamworth Regional Council.

The two projects are together expected to create about 5000 jobs for the city, the proponents said.

"Reactivation of the non-operational rail line between West Tamworth and Westdale will facilitate freight train services to the Tamworth Regional Freight Terminal, opening the gateway with direct rail access to vessels at Port Botany," Minister for Regional Transport and Roads Paul Toole said.

A level crossing, bridge, signalling infrastructure and drainage work will also be needed in construction.

The work will be completed on behalf of Transport for NSW by John Holland Rail, and includes early procurement of rail and sleepers, installing fencing at selected locations along the rail corridor and removing redundant infrastructure such as existing rail and sleepers, Mr Anderson said.

Site investigation work, including geotechnical testing and bridge assessments, were carried out last year.

"The plan to deliver the Tamworth Intermodal Rail Line involves making the most of the existing infrastructure, which will provide a significant cost saving, and minimise the frequency of trains crossing Denison Street, reducing the impact on local traffic," Mr Anderson said.

Transport for NSW, John Holland Rail, Tamworth Regional Council and Qube Logistics have been working together since June last year to develop a plan for freight trains up to about 900 metres long to service the intermodal terminal.

Speaking at the State of the City regional economic update in February, Tamworth Regional Council General Manager Paul Bennett blamed bureaucracy for the delay.

The project's "detailed design" is not yet complete. It is expected by the middle of 2020.