Deputy premier and minister for regional NSW John Barilaro has revealed plans to build a “very fast train” from Sydney to Canberra using funds from the state’s sell-off of the Snowy Hydro scheme.

The $4.2 billion fund was established after the federal government purchased the state’s share of the hydroelectric power utility site in March.

In a statement, Barilaro said the proceeds of the Snowy Hydro legacy fund will be invested into regional infrastructure across five key areas: water security, digital connectivity, “special activation” business precincts, freight linkages, and regional roads and railways. Investment into regional infrastructure was a condition of the federal government's purchase of the state's Snowy Hydro share.

Barilaro told the ABC that in addition to upgrading existing regional train lines, the government would look into building a “very fast train” link between Sydney and Canberra.

"Part of the big problem is the alignment of the rail lines; the tracks themselves need realignment, straightening and new technology. We have an opportunity to invest now in the infrastructure,” he said.

The current train journey from Central to Canberra’s Kingston station takes four and a half hours; a coach service between the two cities takes three and a half.

“These are big picture projects that generations before us have dreamed of and generations that follow us will benefit from,” the minister said in a statement.

The first studies into the proposed regional infrastructure projects will be completed in 2019.

In July, the NSW opposition leader Luke Foley pledged to commit to a $10 million joint study into a fast rail link between the two capital cities. Together with ACT chief minister Andrew Barr, Foley promised to fund $10 million towards a business case for high-speed rail if the Labor party wins the state election in March 2019.