Final designs have been released for level crossing removals at Park Road and Charman Road in Cheltenham, and Balcombe Road in Mentone.
The project will include more than three kilometres of walking and cycling paths connecting the stations, better lighting and accessibility, landscaping, new open space, parking, and potential residential and retail development.
The new designs will incorporate the heritage-listed stations at Cheltenham and Mentone and a third track will be installed at Cheltenham station.
Major construction to lower the rail line into trenches and build two new stations will start in mid-2019, with a two-month construction blitz to excavate the trenches, build the new rail line and remove all three crossings beginning in mid-2020.
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The $536 million package is part of a $3 billion investment into the Frankston line which includes the removal of 18 level crossings, with five already removed, and the construction of 11 new stations.
Minister for Transport Infrastructure Jacinta Allan said the removals will improve safety conditions and reduce congestion.
Contracts have been awarded to Lendlease, Acciona Coleman Rail, WSP and Metro Trains Melbourne alliance.
The line will close for two months when major works begin.