Armidale councillor Peter Bailey is confident funding will come in the coming months to build the southern section of the New England Rail Trail.
"We were actually the first out there trying to get a rail trail, but we've had a few challenges along the way, which we've now dealt with," he said.
"We've put a business case forward and have funding applications in and we're very hopeful we can get the rail trail from Armidale to Ben Lomond funded."
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His comments come after $8.7 million was last week allocated to develop stage one of the New England Rail Trail within two years.
The federal government funding will go to Glen Innes Severn Council to construct the rail trail between Glen Innes and Ben Lomond.
It comes off the back of a business case which predicts the rail trail will bring 4000 visitors per year to the region.
Armidale Regional Council is responsible for the southern stage of the project, from Ben Lomond, and there is some hope the ball will soon be rolling on that development.
In the past there has been considerable public support to see trains return, rather than a rail trail established.
But another Armidale councillor, Margaret O'Connor, has suggested they could co-exist.
"Why can't we put our bike trails side by side with trains? It just makes so much sense," Cr O'Connor wrote in a letter to the Express.
"People who are fit can ride the trail, those who aren't can hop on a train. And a third wonder ... bike riders can actually use the train to find exotic cycling experiences in lovely but remote areas like national parks and gourmet local produce meccas like Guyra and the Granite Belt."
Last year the council received a detailed business case for the project.
The approximately $22 million project to construct the 103km New England Rail Trail would bring benefits worth an estimated $114.6 million over 20 years, according to the business case presented to the council last November.
An accompanying report said the business case presented a "compelling case" to further investigate the project.
Infrastructure consultant Halliburton & Associates was engaged last year to provide an accurate estimate of the costs to construct and maintain the rail trail. Halliburton estimated it would cost $22.05 million to build the trail and supporting infrastructure.
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