At least 150 new jobs are expected to be created at the Creswick Road factory, which has virtually lain dormant since the last trains contract was completed in 2019.

The 2021/22 state budget, to be unveiled on Thursday, will include $986 million to build 25 new X'Trapolis 2.0 trains for Melbourne's metropolitan system.

There are expected to be 750 new jobs in total across manufacturing and supply chains.

It has not yet been made clear what percentage of the 25 new trains will be constructed in Ballarat.

The manufacturing of the trains is expected to begin late in 2022.

Visiting Ballarat on Tuesday, acting premier James Merlino made the announcement.

Premier Daniel Andrews visited the Ballarat workshops in 2015 to announce a $120 million order for 30 new X'Trapolis carriages.

In 2019, workers at Alstom held rallies demanding the state government commit to new long-term construction contracts, including at MP's offices in Ballarat.

There were fears that when work was completed on the current order, there would be no more work and jobs would be lost, and the historic Ballarat Rail Workshops could be closed.

By mid-2020, the workers were reassigned to other roles, following Alstom's takeover of rival Bombardier.

These included maintaining V/Line's Bombardier-built VLocity fleet at Ballarat East.

The state government also allocated $12 million to complete the X'Trapolis 2.0 design work at this time.

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The state government has also begun the tender process for its Next Generation Trams project, of which Alstom is one of the bidders.

Bombardier is also a bidder, but with strict rules in place to separate it from Alstom's, as well as UGL, which has a facility in Ballarat.

A winning tenderer is expected to be announced before the end of the year.

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