The state government contract involves the design and construction of two passing rail loops near the Central Coast locality of Gosford.

Downer said the stretch of track was part of Australia's busiest rail corridor which services Melbourne, Sydney and Brisbane.

It is also the most serious bottleneck on the east coast interstate rail network.

The firm will undertake civil construction works in association with Robson Civil Projects including: construction of 2km of track on both loops; construction of six bridges and retaining walls; associated signalling and electrification works; and commissioning.

The Gosford passing loops project is one of four forming part of the broader Northern Sydney freight corridor program.

Works are expected to be completed by mid-2015.