The West Australian Liberal party's highly anticipated light rail plan will cost $1.8 billion and move 25,000 commuters a day.
Transport minister Troy Buswell unveiled the 22km tram network on Monday, saying it would reduce congestion and take Perth's public transport system "into a new era".
He says he's confident the total cost estimate is accurate.
Under the plan, trams will run from Polytechnic West Balga Campus, along Alexander Drive in Dianella and Fitzgerald Street in North Perth into the city before branching west along Thomas Street in Nedlands to Queen Elizabeth 2 Medical Centre.
The plan also involves running trams through the Hay Street Mall, crossing the Causeway Bridge to Victoria Park east of the city.
Mr Buswell told reporters the Metro Area Express would move about 25,000 people a day.
He says construction will start in 2016 and be completed in 2018.
"Light rail has been assessed as the most suitable option in these areas as it can move many more people in one lane than any number of buses and cars," Mr Buswell said.
Heavy rail was not a suitable option as it would need to be built in a tunnel for much of the proposed route and the land available would not be sufficient.
During peak times, trams would run every five minutes, carry three times as many people as a bus and be powered by electricity, he said.
The announcement comes after the WA Labor opposition kicked-off its election campaign with its ambitious Metronet rail plan, which the party expects will cost $3.8 billion.
The Liberals have mocked the scheme, saying it is more likely to cost $6.4 billion.