Premier Mike Baird confirmed on Tuesday that a new light rail line would link Westmead, Parramatta and Strathfield, with another smaller line serving new suburbs out to Carlingford.
Construction is set to begin in 2018, with the government yet to negotiate the cost with the private sector.
Asked if the government's priorities reflected Sydneysiders' needs, given other parts of the city with no public transport connections, Mr Baird said the new lines were a first step.
"There are opportunities to go further and longer and wider in the long term," he told reporters in Parramatta.
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1,800 public servant jobs to move to Parramatta
Coinciding with the Premier's day in the city's west, the government has also announced it will move 1800 education department jobs to Parramatta.
"Western Sydney is the economic powerhouse of NSW and the NSW government is doing everything possible to further strengthen this dynamic region," Premier Mike Baird said in a statement.
The economic blueprint, entitled Shaping Future Cities: Designing Western Sydney, will provide a five-year plan for the creation of 200,000 jobs in Sydney's west by 2020.
The report called for a new Western Sydney Development Authority to promote and coordinate investment in employment, a 15-minute express train service between Parramatta and the Sydney CBD.
Deloitte Western Sydney Managing Partner, Danny Rezek, one of the report’s authors, said: “This is a practical plan to create jobs. We’ve connected with business leaders across Western Sydney, from many industries, we’ve spoken with universities and state and local governments from Liverpool, Blacktown Penrith, Parramatta and Campbelltown.
“With the right policy settings, incentives and investment, Western Sydney can become an economic powerhouse that drives Greater Sydney and, indeed, Australia.”
Meanwhile Opposition Leader Luke Foley says the decision to move education staff to Parramatta will join the "growing list of empty promises".
"Not one of the seven public service departments or agencies earmarked for relocation by the Liberals has actually moved," Mr Foley said.
