Whyalla workers will produce 147,000 tonnes of steel for key rail projects across Australia, including the Inland Rail project.

Australian Rail Track Corporation has signed a $292 million contract with Liberty Primary Steel to supply the heavy duty rail, supporting 1500 jobs in the South Australian town.

The contract will also support upgrades between Narrabri and Turrawan, a vital connection between Inland Rail and the Hunter Valley coal network, and the Southern Highlands line in NSW.

When completed in 2027, the Inland Rail will provide a freight connection linking Melbourne and Brisbane in a route through regional Victoria, NSW and Queensland.

Deputy Prime Minister Barnaby Joyce said the contract highlighted how Inland Rail was already benefitting Australia.

"Inland Rail will further strengthen our freight network, keeping supply chains open, providing exporters with better access to international markets, and creating jobs and economic opportunities for businesses," he said.

"This contract is a vote of confidence in Australian manufacturing, ensuring the high-quality steel needed to bring Inland Rail to life is made by Australians for the benefit of Australians."

Federal Finance Minister Simon Birmingham said the multi-million dollar contract would be an enormous boost for Whyalla, delivering a pipeline of jobs and economic activity.

"South Australian-made steel is among the highest quality in the world, which makes it only right for it to be used for the construction of Inland Rail and our national freight network," he said.

Liberty Primary Steel has previously supplied steel for Inland Rail, including contracts worth $51 million for the Parkes to Narromine and Narrabri to North Star sections.

Whyalla Mayor Clare McLaughlin said for the city's steelworks to have been chosen for such a significant, long-term contract was a testament to the quality product made by the local workforce.

"It is another sign of the strengthening future of the operations," she said.