The redevelopment of New Street Station could result in a world-class facility and economic catalyst for the West Midlands.
Unveiling the plans at a press conference, Robin Gisby, Network Rail's operations and customer services director said: "The Gateway Project would transform the station, increasing capacity and significantly easing passenger congestion.
"It would provide passengers with world-class facilities, enabling New Street to accommodate the growth of the railway for generations to come."
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He added that simultaneous work was being done to increase rail capacity through the constrained Birmingham rail corridor and the redevelopment plans did not preclude future expansion in that area.
Councillor Mike Whitby, leader of Birmingham City Council, said the local authority and its partners were working to put together a "sophisticated funding arrangement".
Earlier this week, Transport Secretary Alistair Darling said the project would need a "substantial" contribution of public funds although, despite questioning from West Midlands MPs, he stopped short of saying how much.
It is believed the finalised proposals will be submitted to the DfT in the spring.
Coun Whitby said: "Birmingham Gateway is the product of a lot of hard work and analysis by a strong partnership of dedicated professionals. As well as being a catalyst for economic development at the heart of our city, this scheme is good value for money and would deliver significant wider regeneration potential for the region."
Nick Paul, chairman of the regional development agency Advantage West Midlands, said the £500 million project would bring substantial economic benefits for the region.
"The analysis shows that Birmingham Gateway would mean better access to jobs and training for local people and an increase in the number of business travellers and visitors seeking to invest or spend in the region."
Councillor Gary Clarke, regional passenger transport authority chairman, said: "With one in five people arriving at peak times into Birmingham by train, redeveloping New Street station is a top priority for WMPTA and Centro.
"We're fully backing these plans."
