Several high-rise buildings in Sydney’s CBD will be demolished as early as next year to make way for the construction of the Sydney Metro rail line.
The city's central plaza, Martin Place, will also be excavated to build a new underground station, while seven other new stations will be built at key locations including Barangaroo, Pitt Street and Waterloo.
"This is going to be like keyhole surgery here in the centre of the city," Transport Minister Andrew Constance said.
"It's a project which is largely underground, causing minimal disruption, but it is going to obviously be a tough build," he said.
Construction on the project is set to overlap work currently underway through the city's main thoroughfare, George Street, for the 12km light rail line from Circular Quay to the eastern suburbs.
"We'll work the city as we have in terms of the light rail project by giving as much advance notice to the changes which will be required," Mr Constance said.
About 150 homes and businesses, including two high-rise buildings near Martin Place, will be acquired by the state government to make way for the construction.
The railway project will also include twin tunnels, stretching 15.5km from Chatswood to Sydenham, which will run 40m below Sydney Harbour.
The project's environmental impact statement released also revealed that train services into the CBD would rise from about 120 per hour to up to 200 services per hour by 2024, with projections of around 30 million fewer car trips annually by 2036.
"There's no doubt the Sydney Metro will change this city forever," Premier Mike Baird said.
"It future-proofs the city and it provides incredible capacity to carry more people," he said.
The government has not yet released the final cost of the project but the preliminary cost range has been set between $11.5 and $12.5 billion.