Earthworks on Sydney’s second international airport are due to start next year after the federal government committed to building the $5 billion project.
Prime Minister Malcolm Turnbull has described the airport, to be constructed at Badgerys Creek, as "a vitally important project for western Sydney, for Sydney and the nation".
The government's commitment came after Sydney Airport Corporation, which operates the existing Mascot airport, walked away on Tuesday.
The airport has been spoken about since the 1980s.
It will serve about 2.2 million people in western Sydney and Urban Infrastructure Minister Paul Fletcher has already had discussions with Virgin chief executive John Borghetti and Qantas CEO Alan Joyce.
The federal opposition warned the airport would need to be built with a train link operating from the beginning to save it from turning into "a complete joke".
Further details will be revealed in next week's federal budget.