The Victorian government has dumped planned upgrades to Melbourne's busiest train line in favour of a new plan.

The Cranbourne-Pakenham line will instead get a multi-billion dollar overhaul that will see nine level crossings removed and 37 new trains added to ease congestion, Premier Daniel Andrews says.

That will accommodate an extra 11,000 passengers in morning peak hour and eliminate road congestion at some of the worst crossings in Melbourne.

“I live in the southeast so I know the level crossings nightmare all too well,” Mr Andrews has said.

“The boom gates between Dandenong and Caulfield stay down for up to 80 minutes over the morning peak.”

The government will not proceed with the previous Liberal government’s $2.5 billion Cranbourne-Pakenham proposal because they say it doesn’t stack up.

That plan included removing four level crossings and buying 25 new trains.

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It also would have privatised the line, isolating it from the rest of the network for the next 20 years, Labor says.

Instead, the state government will buy the plans from the contractor and build upon it. The project will include signalling upgrades and a new train depot and maintenance facility in Pakenham.

At least 50 per cent of the new trains will be built in Victoria and high capacity signalling will be trialled.

The Victorian Employers’ Chamber of Commerce and Industry said it would create jobs and boost capacity across the network by up to 42 per cent.

The Greens said the only long-term solution to train overcrowding was high capacity signalling, which allows more trains to be run faster.