A $2.3 billion contract to build an inter-city train fleet for New South Wales has been awarded to a company offshore.

Key points: 500 new double-decker train carriages to be built in South Korea

500 new double-decker train carriages to be built in South Korea New trains to run between Sydney and regions including Newcastle and south coast

New trains to run between Sydney and regions including Newcastle and south coast Transport Minister says deal best value for money

The new trains will run between Sydney and Newcastle, the Central Coast, South Coast and the Blue Mountains.

The State Government has awarded the contract to the RailConnect Consortium, which will build 500 double-decker carriages in South Korea.

Transport Minister Andrew Constance has defended sending manufacturing offshore, saying the winning bid offered the best value for money.

"In this case the procurement stacks up, it's a 25 per cent saving by going with this consortium," Mr Constance said.

"If I didn't go with this winning bid you'd be criticising me the other way.

"Of course everyone is pro-Australian manufacturing and jobs but at the same time you've got to weigh it up, in terms of cost and in terms of technology."

Mr Constance said maintenance for the new train fleet would be done at a facility at Kangy Angy on the Central Coast, providing more than 200 local jobs for 15 years.

"There's Australian jobs associated with the bid because there's an Australian partner, UGL, as part of the consortium, so that means everybody wins," he said.

The new rail carriages have space for luggage as well as pram and bicycle storage. ( Supplied: NSW Government )

NSW Opposition Leader Luke Foley said the Baird Government's decision was a crushing blow to local jobs.

He said rival bidders would have provided hundreds more jobs in regions that desperately needed them.

"In Victoria there is a minimum 50 per cent requirement for local rolling stock orders. Here in NSW, nothing," he said.

"The Baird Government is completely disinterested in supporting local manufacturing and local jobs.

"It's these sorts of decisions by governments that crush the hopes and dreams of young people living in regions like the Illawarra and the Hunter. This is a very heavy blow to jobs and manufacturing in NSW."

A spokeswoman for one of the failed bidders, Stadler Rail, said the company was disappointed not to be selected to build the new fleet.

"We felt we put in a strong bid, based on our plan to breathe life back into train manufacturing in NSW by providing new jobs and a major boost to the state economy," she said.

Decision a 'kick in the guts' for Hunter region

Labor spokeswoman for the Hunter, Port Stephens MP Kate Washington said up to 12,000 existing jobs were on the line because of the decision.

"We have got a regional community with double-digit youth unemployment," she said.

"We need to be valuing local jobs, and what that means to regional communities.

"We are seeing regions being kicked in the guts by this Government for the benefit of the bottom line and everyone in Sydney.

"We have got the capacity, capability and expertise in manufacturing of rolling stock in the Hunter, and that's been entirely ignored."

Keira MP Ryan Park said jobs were desperately needed in the area due to the decline in steel-making and mining.

"We need this Government to start listening and hearing from regional NSW, from communities like those here in the Illawarra," Mr Park said.

"We expected [those] in major government contracts to give us some support."

'Smokescreen designed to obscure' killing of industry

The Australian Manufacturing Workers' Union (AMWU) has branded the State Government a "job killer" over the decision.

AMWU spokesman Tim Ayres said the local maintenance jobs on the Central Coast were nothing to crow about.

"It's a smokescreen designed to obscure the fact that they are killing an Australian industry," he said.

The new trains are set to run between Sydney and Newcastle, the Central Coast, South Coast and the Blue Mountains. ( Supplied: NSW Government )

"Maintenance of trains happens in Australia because you can't send a train on a plane to be maintained in China, I bet they would if they could."

The carriages on the new trains will have charging stations for mobile devices at each seat, two-by-two seating arrangements and wider, more comfortable seats.

The first new trains will hit the tracks in 2019, with the rollout expected to take three years.

The RailConnect Consortium is a joint venture between the Hyundai Rotem Company, Mitsubishi Electric Australia and UGL Rail.