A contractor has been selected for a major rail level crossing removal at one of Perth's most notorious suburban roads.

On Friday Transport Minister Rita Saffioti announced Downer EDI was the preferred proponent to build the major rail components of the Denny Avenue level crossing removal project in the Kelmscott CBD.

An artists impression of the new underpass that will replace the Denny Avenue level crossing.

Another design and construction contract for the road portion of the project is currently being fought out by Decmil and Downer EDI.

The whole project includes raising more than 800 metres of track and associated infrastructure for a new road underpass to be constructed at Davis Road, about 300 metres south of Denny Avenue.