The first sod of soil of the $693.8 million Narrabri to North Star project was turned in Moree on Friday, marking the start of up to three years of construction along the 171 kilometre stretch of rail line.
"This is a momentous day," Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack said in Moree on Friday.
"This is one of the largest and most complex sections of the Inland Rail because it's a working rail line.
"This is the second of 13 sections of this nation-building, nation-transforming project."
The first section of Inland Rail between Parkes and Narromine was completed this year, which saw more than $100 million spent with local businesses and created nearly 700 jobs for locals.
Mr McCormack said the Narrabri to North Star project will deliver 500 direct jobs, not to mention the hundreds of indirect employment opportunities. It will also deliver millions in economic stimulus to north western NSW.
"The $693.8 million construction effort on Narrabri and North Star brings immediate stimulus to the regional communities of Narrabri, Bellata, Moree, Croppa Creek and North Star and those townships in between," Mr McCormack said.
"In real terms, it means more money spent locally, more money spent with local, regional and Australian businesses at the same time as building an asset that will benefit our nation for generations.
"This is going to generate confidence ... it will create jobs, create opportunities and that is what the Inland Rail is all about."
Friday's milestone was a particularly proud moment for Local Member for Parkes and Minister for Regional Health, Regional Communications and Local Government Mark Coulton, who spoke about the Inland Rail in his maiden speech in parliament back in 2008.
"I'm incredibly excited about this," he said.
"As a mayor of Gwydir, I remember going to an Inland Rail meeting in Parkes in 2004.
"Inland Rail is one of the main reasons I got into politics, so today's sod turn is a very proud moment for me, and a key achievement for the Australian Government.
"It's a project that will open up eastern Australia for business and allow farmers to get their products to domestic and international markets, which is welcome news for the councils in North West NSW that represent a region rich in agriculture.
"Inland Rail is necessary to meet Australia's growing freight transport task for the next 50 years, and all levels of government are working together to leverage the long-term benefits of Inland Rail to attract new businesses to regional Australia.
"From the special activation precinct in Moree to Narrabri's Inland Port, private businesses and industry are setting up shop because they can see the long-term growth Inland Rail is bringing to these regional communities.
"No-one is prouder than me to see this."
Mr McCormack and Mr Coulton were joined by Inland Rail CEO Richard Wankmuller, ARTC CEO Mark Campbell, representatives from Trans4m Rail and the mayors of the three shires the Narrabri to North Star section will run through - Ron Campbell from Narrabri, Katrina Humphries from Moree and John Coulton from Gwydir - as well as Jamie Chaffey, mayor of outlying shire Gunnedah.
Moree mayor Katrina Humphries said this is a once-in-a-lifetime project and one that is set to see Moree boom.
"We're very, very excited and very grateful," she said.
"Every day is a good day in Moree, but this is even better. This is super special."