Spanish builder Acciona says a consortium it is part of has signed a contract worth 1.4 billion euros ($A2.1 billion) to build and operate a light rail line through Sydney.
The NSW government in October announced it had selected the Connecting Sydney consortium, which also includes France's Alstom, Australian investment fund Capella Capital and Transdev, to carry out the project.
The 12km light rail line will link Sydney's central business district to the southeast of the city and will include stops in several key locations such Sydney Football Stadium and the University of NSW.
Work on the line is scheduled to start in April 2015 and it is expected to start operating at the beginning of 2019.
The project is expected to provide a significant boost of more than $A4 billion in economic benefits to the NSW economy and create 10,000 jobs.