"New York City is the linchpin of Amtrak's service network in the Northeastern United States, and I welcome this long-term partnership with Amtrak to preserve and enhance the role of rail in New York State and across the region," Paterson says in a statement. Sen. Charles Schumer, who proposed the plan to relocate Amtrak operations from Penn Station six months ago and helped negotiate the agreement, says in a statement that it's "a critical step forward in the effort to get the Moynihan Station back on track and keep it that way until it's done."

The plan announced Sunday calls for a new train hall to be constructed in the Farley building, with costs estimated at $1 billion to $1.5 billion, according to published reports. It will be paid for largely through federal stimulus funds, although there is reportedly a gap of several hundred million dollars.

The agreement also creates a partnership between New York State and Amtrak to plan for the long-term future of the station complex and the New York City intercity and regional rail network, according to the release from the governor's office. The New York Times quoted a Schumer spokesman as saying that the state had agreed to Amtrak's request to share in revenue from retail outlets in the expanded station and to make some design changes.