KiwiRail has accepted the Hawke's Bay Regional Council's offer to lease the Napier to Gisborne rail link.
The council has led the way in reinstating the operation of the rail line, a decision which has seen support from all three mayors in the area.
Although KiwiRail has agreed to lease it to the council, it comes with a number of conditions. KiwiRail will not commit to any funding or work required for repair.
The line has been out of action since 2012 after it was damaged during major landslips caused by stormy weather.
The next step is for the regional council to consider KiwiRail's offer to see if it makes sense as an investment and it has until March next year to respond.