The planned 11-kilometre tunnel will stretch from Blackheath to Little Hartley, bypassing Mount Victoria.

It's part of upgrades to the Great Western Highway that NSW Regional Roads Minister Sam Farraway says will save drivers 30 minutes on a peak-period trip between Lithgow and Katoomba, a drive that currently takes about 45 minutes.

"It's record breaking, it's history making and will revolutionise travel from the east to the west," Mr Farraway said on Sunday.

The toll-free tunnel is now the preferred option for connecting the two villages following feasibility investigations that began in May last year, Regional NSW Minister and Deputy Premier Paul Toole said.

"This is a complex, ambitious plan but we're on track for shovels to hit the ground on the east and west stages of the upgrade early next year," he said.

The proposal includes dual carriageways in separate twin tunnels.

Other proposed upgrades including widening the highway between Katoomba and Blackheath, new bridges, and active transport links.

The tunnel will provide a safer path through the Blue Mountains, Mr Farraway says, keeping traffic moving when crashes and natural disasters can cause the current roads to close.

He says the upgrades and improved travel times will also boost economic development and population growth west of the mountains.

The project could provide up to 3900 full-time equivalent jobs during the five-year construction phase.

Australia's longest road tunnel is currently the M8 tunnel, part of Sydney's WestConnex project.

Like WestConnex, the Great Western Highway upgrade is being jointly funded by the NSW and Commonwealth governments to the tune of $4.5 billion.

Transport for NSW is running consultation with locals and traditional custodians including the Wiradjuri, Dharug and Gundungurra communities through face-to-face and online sessions in the coming weeks.

A formal consultation period will follow later in the year following the exhibition of the tunnel's environmental impact assessment.

Australian Associated Press