The funding will support the initial phase of the project, which involves extending services to Gilroy in 2018, and trains are expected to begin operating to Salinas a few months later.

The $US 135.7m scheme will involve the construction of new stations at Watsonville, Pajaro, and Castroville.

So far the Transportation Agency for Monterey County (TAMC) has secured $US 45m in local, state and federal backing, and is seeking a further $US 75m in federal small starts funding.

Operations are expected to start with two daily return services, eventually increasing to six return trains as demand grows.