The cost of the City Rail Link has jumped to between $2.8 billion and $3.4 billion, according to a senior source.
LISTEN ABOVE: Bernard Orsman of the NZ Herald speaks to Leighton Smith
Until now, the cost of the 3.4km underground rail tunnel between Britomart and Mt Eden has been put at $2.5 billion, although Auckland Transport has said the final cost will be dependent on tenders for remaining contracts.
It is understood the Government insisted overnight that a dollar figure be made public today when it signs a head of agreement with Auckland Council to pay half the cost of the project.
Yesterday, the Government and council had planned to leave out a dollar figure on the project until tenders are let for the remaining contracts.
The Government will claim the cost is based on information it received from Auckland Transport, the source said.
In June, Prime Minister John Key predicted the rail link will "almost certainly cost more than they thought".
The council's governing body is discussing the heads of agreement on the rail link behind closed doors this morning.
Transport Minister Simon Bridges and Auckland Mayor Len Brown are expected to release details of the agreement about midday.