A rail line to Melbourne Airport appears set to finally go ahead after the airport agreed to compromise in its long-running dispute with the Victorian Government and drop its demand for the airport rail station to be underground.

But the project will still be delivered at least four years late.

In a statement released on Monday, Melbourne Airport said it will drop its demand for the airport station to be underground.

Instead, the airport has agreed to support and above-ground station.

Set to open in the early to mid-2030s, the Melbourne Airport Rail Link will connect Melbourne Airport to the Melbourne metropolitan train network and the regional Victorian train network for the first time.

Once operational, airport passengers will be able to travel from the Airport to the Melbourne CBD via rail in around 30 minutes.

Melbournians will enjoy direct access to the airport from more than 30 stations. Most other passengers will be able to access the airport with only one change.

Turn up and go services will run via the new Melbourne Metro Tunnel to an upgraded station at Sunshine.

From there, trains will travel along a new line from Sunshine to the airport with new stations at Keilor East and the airport.

The line is expected to be particularly critical as the airport prepares to more than double its patronage between now and 2040.

As things stand, the airport currently welcomes around 100,000 passengers each day.

By 2042, this number is set to more than double to an estimated 210,000 passengers.

This is occurring as the airport is expected to spend about $3 billion in building an additional north-south runway.

As things stand, there are currently no railway lines which connect with Melbourne Airport. This is despite the idea of a railway connection to the airport being first considered in 1958.

Instead, airline travellers wishing to access the Melbourne CBD or elsewhere are forced to rely on private transport, bus, taxi or Uber.

The latest move will pave the way for an end to a four-year dispute between the Victorian Government and the airport regarding the station to be built at the airport.

The airport had argued that the station should be constructed underground. It feared that the existence of an above-ground station and line will place constraints upon the possible future expansion of the airport.

The Victorian Government, however, argued that an underground station and line would be prohibitively expensive.

Last November Federal Treasurer Catherine King appointed Neil Scales as an independent mediator in an effort to resolve the impasse.

Last month, Scales reported that the project remained ‘viable and necessary’.

But he said that the station should be above ground unless a comprehensive business case was put forward for an underground station.

In a statement announcing its decision, Melbourne Airport chief executive officer Lorie Argus said that the airport recognised that the project needed to move ahead quickly in order to cater for airport passenger growth.

She said that the airport would welcome the recommencement of discussions with the government in respect of the rail line’s construction.

Angus said that the initial focus of discussions should revolve around design, sequencing of construction works and redress in respect of the land that will be required in order to make way for the above ground construction.

“Victorians have waited long enough for an airport rail line,” Argus said.

“We will work with the Victorian Government to deliver their preferred above-ground station at the airport so the rail line can become reality.

“With an estimated 45 million travellers a year predicted to be using our airport when the third runway opens, the rail link will support a massive increase in passenger numbers and billions of dollars in additional economic activity for Victoria.

“While Melbourne Airport has consistently advocated for an underground station, we are prepared to compromise on our position to ensure we have more transport options in place for the millions of new passengers that will visit Victoria and the airport precinct’s expanding workforce.”

Speaking to reporters on Monday, Victorian Premier Jacinta Allen welcomed the airport’s announcement but said that the project would now not be complete until at least 2033.

She said that details surrounding the latest cost estimate for above-ground rail are yet to be worked through.

Also yet to be worked through are arrangements about who will pay for costs over and above the $10 billion in funding which is set to be jointly funded by the Commonwealth and state governments.

The Age has reported that the project could now cost as much as $13 billion.