The restoration of the Derry to Portadown line is one of the main recommendations made in a review of the railway network across the island of Ireland.
The draft report of the first all-island strategic rail review suggests that the line should be reinstated and would link on to Letterkenny in Co Donegal.
The review has said this would "link the large towns of Strabane, Omagh and Dungannon to the rail network" and therefore "greatly improve intercity connectivity" from the north west to Belfast and Dublin.
The report, presented to the Republic's cabinet on Tuesday, has 30 recommendations on developing a rail network for the benefit of commuters, businesses and communities.
It also looks at the impact on the environment and on the all-island economy.
The 25-year plan examines electrification of the rail network, faster and more frequent trains as well as new routes for people and freight.
The cost of implementing the recommendations is estimated to be between €35 billion and €36.8 billion.
Read more:
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It has been suggested that costs would be split between the two jurisdictions, with Northern Ireland taking a 25 per cent share.
However, the review cannot be formally published until a Stormont minister is in place to sign it off.
SDLP leader Colum Eastwood welcomed the review and said it represents a "once in a generation opportunity to restore rail infrastructure across the north".
"I am particularly glad that the restoration of rail from Letterkenny to Derry and on to Portadown is a key recommendation of the review," he said.
"The withdrawal of rail services in the west has left substantial scars on communities here that have never healed because the promised investment in roads infrastructure was abandoned for decades.
"This plan is a rededication to people in the west."
The All Island Strategic Rail
— The SDLP (@SDLPlive) July 25, 2023
Review is one of our proudest achievements in the last term of government.
We now have a £30bn rail restoration plan that will decarbonise transport, connect communities to opportunity and bring people across our island closer together. pic.twitter.com/aDIqp1i76y
Other recommendations include reinstating the line from Portadown to Armagh, Cavan and Mullingar as well as building a new direct line between Lisburn and Newry.
It is also suggested that electrifying "much of" the network and integrating bus and rail ticketing and timetabling to improve access.
The review also recommends connecting Dublin, Belfast International and Shannon airports to the rail network, which would give 90 per cent of commercial aviation passengers access by train.
Short-term recommendations include at least hourly services between major cities and one train every two hours between other centres.
The plan calls for an increase to rail-freight capacity to take more trucks off roads.
It seeks to decarbonise the rail network with more electrification and the use of battery and hydrogen traction.
Green Party leader Eamon Ryan, who brought the draft report to the Cabinet, said: "Early parts of the last century, we probably had the best rail network in the world. We've let it lapse.
"We've lost lines, we've given up on rail freight. We don't have connection to the northwest.
"And what the report says is: We bring back rail. We bring back rail as a way of getting better balanced regional development."
