Victoria will build 25 new trains worth nearly $1 billion dollars.
Thursday's state budget will feature $986 million for the X'Trapolis 2.0 trains, which will take over from the ageing Comeng fleet.
The trains will be designed and built mainly in Victoria and they will support about 750 jobs.
The announcement was made on Tuesday in Ballarat, where about 150 of the jobs will be based at rolling stock manufacturer Alstom.
Craigieburn's train maintenance facility will also be upgraded as part of the project.
Manufacture is due to start late in 2022.
"These are trains made in Victoria, for Victorians, by Victorians - supporting local jobs at a time we need them most," said Acting Premier James Merlino.
