The two shortlisted bidders for the 8km extension of the South Morang line are John Holland and a McConnell Dowell Constructors/UGL Engineering joint venture.
A new station will be built in Mernda, a second will be built near Marymede Catholic College, and bidders have been asked to price a third station near Hawkstowe Parade.
The project will also deliver new train stabling facilities and involves five grade separations, ensuring that no level crossings will be created by the new line.
A contract for the Mernda Rail Extension is expected to be awarded in early 2017, and construction will begin shortly after. The new line will be complete and operational in 2019.