TRAMS will become a major part of Sydney's commute again, the O'Farrell government will announce in its long-awaited final transport plan for the state.

The plan will commit the government to starting construction on a light rail line from Central to Randwick before the next election, with an extension through George Street and the city centre to Circular Quay after that.

Dusted off ... light rail solution.

The line will run along Anzac Parade, adjacent to the University of NSW, Randwick Racecourse and the Sydney Cricket Ground.

It will pass through Surry Hills either in a tunnel or snaking through the streets. Sources said the government was leaning to running trams on the surface to reduce costs.