Transport and Roads Minister Andrew Constance said the "city-shaping" Western Sydney Airport Metro will deliver a "vital boost" to the NSW economy.
Major construction is set to commence soon on the project which has recently received planning approval by the state government.
The 23-kilometre driverless metro will link the new Western Sydney Aerotropolis with the Western Sydney International (Nancy-Bird Walton) Airport and feature six metro stations at St Marys, Orchard Hills, Luddenham, Airport Business Park, Western Sydney International Airport and the Western Sydney Aerotropolis.
"The construction of Sydney's newest Metro rail line expected to support around 14,000 jobs, including 250 apprentices," Mr Constance said.
"Community feedback has helped shape the Metro project, including introducing measures to further reduce parking impacts on local communities and the relocation of a temporary bus interchange."
Communications, Urban Infrastructure, Cities and the Arts Minister Paul Fletcher said once operational, the new Metro is expected to transport up to 7740 passengers each hour in each direction, while also taking about 110,000 vehicles off local roads every day, significantly reducing local traffic.
With the project now getting he green light, the tunnelling contract is expected to be awarded by the end of the year and tunnel boring machines in the ground by the end of 2023.
"The Morrison Government is providing a once-in-a-generation level of funding in a range of major infrastructure projects across western Sydney, to transform the region and foster the creation of Australia's future industries," Mr Fletcher said.
"This includes working closely with the NSW Government to deliver this new multi-billion dollar Sydney Metro line, which will provide a critical link to the new Western Sydney International (Nancy-Bird Walton) Airport and improve connectivity for local residents."
Jobs, Investment, Tourism and Western Sydney Minister Stuart Ayres said the initial operating capacity will see trains travelling in both directions every five minutes during peak periods, so customers won't need a timetable.
"They'll just be able to turn up and go," he said.
"It will take just five minutes to travel from the airport to the Aerotropolis, about 15 minutes from the airport to St Marys and 20 minutes from the Aerotopolis to St Marys - where customers can connect to the rest of Sydney's rail network."