Prime Minister Anthony Albanese says the government's investment in Newcastle Airport is a "vote of confidence" that the Hunter is "absolutely central" to the nation's future.
Mr Albanese broke ground on the airport's $110 million terminal building at a ceremony at Williamtown on Thursday.
The government is providing half the construction costs for the new two-storey terminal, which will take 18 months to build and help the airport attract international flights.
The PM said the Hunter was an "extraordinary asset" which "we haven't been able to maximise enough because people haven't been able to directly fly here".
"Now this airport has the potential to open up as a gateway not just to other parts of Australia, but to the world," he said.
"And these upgrades that are taking place are aimed at doing just that, maximising the potential."
The former government announced it would help fund the airport expansion during the 2022 election campaign, a commitment matched by Labor at the time.
Mr Albanese said on Thursday that the funding confirmation was a "vote of confidence that says we can create jobs here, we can create economic activity here, we can grow this economy enormously".
"This region has helped to power NSW and the nation over the last more than 100 years," he said.
"We can do much more. In this region we can be the powerhouse of new energy.
"We can be a powerhouse of advanced manufacturing.
"We can be a powerhouse of tourism, and I look forward to that playing out over coming years."
He said the upgraded airport would bring "literally thousands and thousands" of "good, sustainable" jobs to the region.
"This region will continue to be absolutely central to the future of this state and this country," he said.
"That's why this investment will make an enormous difference."
Mr Albanese said the Hunter had a "bright future" and mining towns such as Muswellbrook and Singleton had "opportunities for much more advanced manufacturing to take advantage of the skill base which is there."
The PM joined Paterson MP Meryl Swanson, airport board chair Jude Munro and acting chief executive Shane De Wit in turning the first sod with gold-coloured shovels at the construction site next to the existing terminal building.
Ms Munro, who also chairs the Victorian Planning Authority and is a former Adelaide and Brisbane council chief executive, took over from former airport chair Kirby Clark last week.
