After months of delays and a $1.3 billion budget blowout, the NSW Premier announces an opening date for Sydney's light rail line between Circular Quay and Randwick.

The light rail will carry passengers between Circular Quay and Randwick, in Sydney's eastern suburbs, and will be free for the opening weekend, NSW Premier Gladys Berejiklian announced.

"The CBD and South East Light Rail is a big step towards revitalising our city and will transform the way we live, work and go out in Sydney," Ms Berejiklian said.

She said the network could move up to 13,500 commuters an hour in both directions during peak times and would replace "the conga line of buses which used to sit in traffic on George Street".

Transport Minister Andrew Constance said the first passenger service will start at 11:00am on Saturday and run between Circular Quay and Randwick until 1:00am.

The project was slated to be finished in March but had been plagued by multiple delays, legal disputes and budget issues.

Its final price tag will be $2.9 billion — almost double the original cost predicted by Ms Berejiklian in 2012, when she was the transport minister.

PHOTO: Many residents complained that the ongoing construction robbed them of sleep. (Supplied: Sydney Light Rail)

For years, George Street and parts of Sydney's eastern suburbs were turned into a construction site.

The second leg of the project — a spur line to Kingsford — is expected to be completed by March.

In June, the NSW Government settled a long-running legal dispute with Spanish subcontractor Acciona, which was suing for $1.2 billion.

The firm said the State Government made misrepresentations about the utilities in the lead-up to the signing of the contracts.

The NSW Government agreed to a $576 million compensation payout, withholding $129 million until construction deadlines were met.

PHOTO: Light rail construction has had a large impact on Sydney's CBD. (AAP: Dan Himbrechts)

The safety and availability of light rail was cited by Ms Berejiklian as a key factor for recently scrapping the controversial lockout laws.

Part of last month's lockout law changes included removing the 1:30am cut off for entry to venues in Sydney's CBD, meaning many late night venues will likely extend their hours to operate well into the morning.

However, the Government said the light rail's operating hours will be from 5:00am to 1:00am every day, meaning many late night revellers will not be able to use the service.

This year will be the first time since 1961 that trams have run on George Street.