The proposed route, one of four considered in investigations, departs the existing Sydney line 1.5 kilometres north of Fassifern station and runs through multiple suburbs in Lake Macquarie and Newcastle's west before reconnecting with the Hunter line at Hexham and Tarro.
It skirts existing residential and industrial areas, particularly at West Wallsend, Cameron Park and Black Hill, and includes one long tunnel, two underpasses of arterial roads and two bridges over the M1 Pacific Motorway.
A website for the project, more recently known as the Lower Hunter Freight Corridor, went live on Monday to begin a month-long period of community consultation.
Regional Transport Minister Paul Toole said the corridor needed to be protected before urban sprawl swamped available land and the freight rail task increased.
"The plan to separate the majority of freight and passenger rail services between Fassifern and Newcastle will increase the efficiency and reliability of the rail network for both freight and passenger services, and help businesses and industry move freight more efficiently, supporting growth across the Hunter region," he said.
"With the NSW regional freight task expected to increase 12 per cent in the next 15 years, we need to ensure land is available to deliver essential freight rail infrastructure, in the future, and when it is needed."
The dedicated freight line has long been regarded as a solution to alleviating pressure on the existing rail line and easing traffic congestion at the Adamstown and Islington railway crossings. The government listed it in 2018 as a project 10 to 20 years away and this is reflected in the released documents.
A 157-page draft environmental assessment says the "key driver" for the corridor's protection "in advance of the need for" the line is that "encroaching" development "would limit opportunities in the future to secure land".
Infrastructure Australia has previously called for the corridor to be protected and said in a 2017 report that the line's per-kilometre cost would almost triple if land wasn't secured as extra tunneling would be required.
One 1.6 kilometre tunnel is outlined as required to the north of Fassifern on all four examined alignments.
Further north, the preferred route is the only option which does not follow the disused Richmond Vale Railway between Minmi and Hexham. It instead runs along mainly the western side of the M1 Motorway.
By following "existing and planned infrastructure" corridors, including the planned M1 Motorway extension between Black Hill and Raymond Terrace, there would be fewer "impacts on property, biodiversity and visual amenity", the report says.
Using the section of the Richmond Vale Railway running across Hunter Wetlands National Park would require further geotechnical and environmental studies. The report also acknowledges that it is planned to be repurposed as a cycling trail.
The Lower Hunter Freight Corridor has attracted funding allocations of between $11.8 and $19 million in each of the past the six state budgets, including $12 million this year. However, only $4.75 million had actually been spent on planning the project prior to June 30.
Business Hunter CEO Bob Hawes said the Fassifern to Hexham rail link had been proposed "for a very long time" and it was pleasing to see it move forward.
He urged businesses and the community to review the released documents.
"Consultation on the potential corridor for the line is an important first step, even though construction could be decades away," he said.
"We are relieved this step has been taken, as we were concerned that if it did not proceed the allocation of funds in the state budgets could be dumped.
"The tide of urban development has been creeping westwards for decades and it is vital that reservation of a suitable corridor occurs before this task becomes too constrained."
Mr Toole said most of the corridor land was government-owned but Transport for NSW would be contacting landowners who would potentially be impacted.
Community feedback will help confirm an alignment. Once decided on, the corridor would be protected under planning legislation. The consultation period runs until August 17. Feedback can be made online at transport.nsw.gov.au/corridors.