The Turnbull government will build Western Sydney Airport, with the details to be outlined in next week's federal budget.
This follows Tuesday's announcement by Sydney Airport, the owner of Kingsford Smith airport, that it will not take up the opportunity under its right of first refusal to build and operate the new airport at Badgerys Creek.
"It is a vitally important project for Western Sydney, for Sydney, and the nation, which is why the Coalition government ended decades of indecision by committing to the project in 2014," Prime Minister Malcolm Turnbull said in a statement.
The government has undertaken a significant amount of contingency planning ahead of the refusal decision.
It is committed to a 2026 operation date for the airport, which would have a 3700 metre runway and terminal capable of servicing 10 million passengers a year.
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On-site works are expected to start in 2018.
Road upgrades are already under way and a scoping study is being undertaken into the rail needs of the region and the airport.
Federal, state and local governments are also working on the details of a Western Sydney "city deal" promised at last year's federal election.
As well, a Forum on Western Sydney Airport chaired by Western Sydney University chancellor Peter Shergold is leading community consultation on the project, which remains controversial among local councils and the public.
A study has shown the existing Sydney airport will have no scope for growth of passenger services beyond 2035 and all slots for airlines will be filled by 2027.
It's estimated the new airport could create 9000 direct jobs by the early 2030s and 60,000 in the long term.
