Federal Labor announced this week it would contribute $2.1 billion to revive the longstanding controversial project, which will receive an additional $520 million from the NSW Labor government.
Ms Keneally on Saturday said the state government would fund its portion from its existing $50.2 billion 10-year transport blueprint.
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"I've seen claims from the NSW opposition that the Parramatta-to-Epping rail link is not in our transport plan, that it has not been identified by this government as a priority, and that it was just brought on in the context of an election," Ms Keneally told reporters in Sydney.
"That is patently wrong."
State opposition leader Barry O'Farrell said on Friday other transport projects would miss out to accommodate the additional transport spending.
Ms Keneally released a letter from NSW Treasury confirming funds for the link are available within the existing transport plan.
The state's funding for the rail link makes up just one per cent of the budget for Labor's transport blueprint.
The Premier also denied claims Transport Minister John Robertson did not believe the link was a priority.
"If you look at the transport plan that we released in February, there on page 43 we have identified the Parramatta-to-Epping rail link as a priority project that could be brought forward should additional funds become available from the commonwealth," she said.
"The opposition, quite frankly, have got it all wrong."
