The NSW Government will pay offshore firms $2.3 billion to build its next fleet of trains.

The RailConnect Consortium will build 500 double-decker carriages in South Korea, before sending them to run between Sydney and Newcastle, the Central Coast, South Coast and the Blue Mountains.

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

The new carriages will feature wider and more comfortable two-by-two seats, with charging stations for mobile devices.

Transport Minister Andrew Constance said the decision was based on 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.”

The minister says maintenance will be done onshore at a facility at Kangy Angy on the Central Coast, providing up to 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

NSW Opposition Leader Luke Foley said the Baird Government's savings were short-sighted, because picking a rival local bidder would have provided hundreds more jobs.

“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.”

Labor spokesperson for the Hunter, Port Stephens MP Kate Washington said the decision puts thousands of jobs on the line.

“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.”

The Australian Manufacturing Workers' Union (AMWU) opened fire on the decision.

“It's a smokescreen designed to obscure the fact that they are killing an Australian industry,” AMWU spokesperson Tim Ayres said.

“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.”