Hopes new trains will boost economic activity across the lower North Island

Greater Wellington Regional Council's announced French firm Alstom will build 18 new battery-electric trains at a cost of more than a billion dollars.

Ninety percent of the cost is funded by government.

Transport Minister Chris Bishop says the benefits won't just be found in Wellington.

He says the investment means Palmerston North will functionally now be included in the Wellington metro rail network.