The future of the project, debated on and off for about 26 years, will hang on the outcome of the $300,000 Federal Government study.

It is hoped the completion of the dedicated freight line will not only reduce the amount of trucks on regional roads but also support the ongoing $600 million expansion at Port Kembla.

Federal MPs Sharon Bird and Jennie George will today reveal the company which will undertake the long-awaited study into the rail link.

Ms Bird remained tight-lipped on the successful applicant, saying only that it was Wollongong-based. She said the study would ultimately determine the future of the project.

"This is a really critical step," she said.

"What this particular feasibility study will look at is whether there is a possible way to go ahead."

Ms George believes an economic case can be made for the construction of the line but believes that either way the study will "put the issue squarely to rest one way or another".

"I am confident ... that the economics will stack up," she said.

"The port, as I see it, is diversifying the freight that passes through it and with it becoming a major centre for cars, in our view, the argument (for the rail link) stacks up, but now we will have to wait for the independent economic analysis of the case."

The rail project, begun under the Neville Wran Labor government in 1983 to improve access for coal trains into Port Kembla, was based on a perceived coal boom of 28-30 million tonnes per annum in the Maldon area which did not eventuate.

The project was dumped under the Nick Greiner Liberal government in 1988 which, after spending $30 million on the project, decided the economics didn't stack up.

The new study was an election commitment by Ms Bird in the lead-up to the 2007 federal election.

The study will examine the condition of the existing track, including any remedial works which might be needed. It will also look at future freight markets to 2020, along with an analysis of existing road and rail freight networks.

A decision will also be made on whether to use the line as a commuter service.

The study is expected to take three months. Ms Bird and Ms George said they would report the findings.

"All being well, if it stacks up, then we have the next challenge of getting Federal Government commitment to the rail link," Ms George said.