A proposed passenger rail service between Hamilton and Auckland could be up and running by 2020 if it gets council approval.

Transport Minister Phil Twyford announced today that Waikato councils will consider the business case for the rail service after the Waikato Regional Transport Committee voted unanimously to include it in its local land transport plan.

Twyford said the final business case, approved by the New Zealand Transport Agency, proposed a start-up service costing $57.77 million over the next three years.

It will now be considered by Waikato Regional Council, the Waikato District Council and the Hamilton City Council.

"The initial service, intended to start in March 2020, would be operated by KiwiRail and include a northbound morning-peak service and a southbound evening-peak service," Twyford said.

The four-carriage train, which can carry 150 passengers each way, would stop at Frankton, The Base, Huntly and Papakura.

"The Huntly platform would need to be upgraded and a new island platform would be needed at The Base," he said.

"As demand grows, it would be expanded to a five-carriage train carrying up to 200 passengers."

Twyford said the Government plans to invest close to $4 billion in public transport, rapid transit and metro rail across the country through the National Land Transport Fund in the next three years.

"Instead of transport investment trying to play catch up, we need to lead growth and shape our towns and cities," he said.

"More people are commuting between Hamilton and Auckland, and introducing this service will give them a choice in how they do that."

The NZTA Board will consider whether to fund the proposed start-up passenger rail service in December after the councils have made their decisions.

A commuter rail service between Auckland, Hamilton and Tauranga was first promised by the Coalition Government in August of last year - despite little interest from Auckland Council.

Auckland councillor Daniel Newman earlier said the idea was ludicrous and unaffordable.

Other concerns raised have been the time the train would take to travel between Hamilton and Auckland, how many people will be using the service, whether it was a good deal for the ratepayers and operational costs.

Councillor Garry Mallett earlier stated that this experiment had been tried before and he believed it would not work out economically.

"I think this thing economically does not stack up. The level of non-user-pays will be unsustainable and if you try and make it user-pay the cost will be so much that the users won't use it," he said.

"I can't see a huge benefit."

However, the regional council wants NZTA to approve a financial assistance rate of 75 per cent for operational expenditure and 100 per cent for capital expenditure for the train service.

"It is very clear what the commitment from central government is and what is required to deliver on the passenger rail service," said Central North Island Director for NZTA, Parekawhia McLean at a meeting in June.

Councillor Dave Macpherson, who has advocated for the rail service for many years, earlier said now is the best time to re-implement the passenger service.

"If we don't start it now, with a government that supports it I suggest it probably never will," Macpherson said.

"This train is going to be the solution for some people and it is going to provide an alternative solution."