The first of the 512 double-deck train carriages to be rolled off the assembly line in South Korea will begin services to Newcastle, the Central Coast, Illawarra and the Blue Mountains in 2019.

The deal is the biggest train contract since the state government awarded the troubled Waratah project to a Downer EDI-led consortium almost a decade ago to build carriages in China.

Downer is one of three bidding consortiums to have lost out to UGL Rail, an Australian engineering firm which will have a 15-year contract to maintain the new carriages at Kangy Angy on the central coast.

The new trains to be delivered over three years will feature two-by-two seating on upper and lower decks, cup holders and tray tables and charging stations for mobile phones. They will also include toilets accessible for the disabled, and dedicated storage space.

Defending the decision for the carriages to be built in South Korea, Transport Minister Andrew Constance said more than 200 jobs would be created to maintain the trains.

"This is the best outcome for taxpayers," he said. "Very pleasingly there is an Australian partner delivering Australian jobs as part of this consortium.

"In this case the procurement stacks up – it's a 25 per cent saving by going with this consortium. I will hold them to account as they work through the procurement."

As part of its unsuccessful bid, Swiss train builder Stadler had proposed to build a plant at Wollongong to assemble and maintain the carriages, and create 600 jobs.

NSW Labor Luke Foley said the decision was a "crushing blow to local manufacturing and local jobs" in places such as Wollongong where youth unemployment stood at almost 17 per cent.

"We could have had 600 people working here [in Wollongong] assembling new train carriages, maintaining them," he said.

The $2.3 billion contract to build and maintain the trains is less than the government's original estimate of $2.8 billion for the off-the-shelf carriages.

However, it does not include the cost of building the maintenance plant at Kangy Angy.

Last year, the NSW auditor-general warned that the total cost of the project, including the new maintenance facility, would rise to as much as $3.9 billion.

"We will come well within the $3.9 billion," Mr Constance said on Thursday.

UGL's consortium partners, South Korea's Hyundai Rotem will design, manufacture, test and commission the carriages.

Transport authorities in the US state of Pennsylvania were recently forced to temporarily remove from service a third of 360 carriages Hyundai Rotem was responsible for designing and building.

However, NSW TrainLink chief executive Rob Mason said he was "very confident" Hyundai and the other consortium member, Mitsubishi Electric, "will deliver us a very, very safe, reliable and comfortable train".

"Commissioning will be done here in Australia," he said. "We won't be allowing the train onto the system until it is safe and reliable."

He also emphasised the consortium had successfully delivered more than 4000 train carriages to New York railway operators.

Mr Mason said the trains would have automatic door settings to ensure people could not exit the carriages when they were not beside a station platform.

The awarding of the contract for the intercity fleet comes several months after the government earmarked more than $1 billion for new suburban trains for Sydney's overstretched rail network over the next four years.