The work includes the removal of the old track bed and other route preparation activities in advance of the re-instatement of a double track railway and passenger services to Leven.
By utilising much of the existing double track bed it allows a cost-effective delivery of capacity for passenger, charter and freight service growth and a step-change in new journey opportunities across the wider economic area to places of education, work and leisure.
The first services to run on the line will be diesel operated before conversion to electric operation at the earliest opportunity. Electrification now, as part of the Scottish Government's decarbonisation action plan, will enable the earliest possible transition to electric services minimising future passenger disruption and ensuring work is delivered at the most efficient cost.
Two new fully accessible stations will be constructed at Cameron Bridge and Leven, both benefiting from active travel access infrastructure linking local communities and places.
The programme will also explore the potential opportunities for freight and tourist/charter train operations to maximise the value this transformational investment can bring to the Levenmouth area.
Bill Reeve, director of rail, Transport Scotland said:
"The Levenmouth Rail Link demonstrates our ambition not just for improving and investing in Scotland's Railway, but also our commitment to communities as new rail links bring many additional benefits such as connectivity to the wider economic area to allow new journeys for work, education and leisure.
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"Our experience from the highly successful Borders Railway project makes clear the maximum benefits of the railway investment are realised where they are delivered as a package of improved transport measures and underpinned with community initiatives and projects. That is exactly what we are doing at Levenmouth as we work towards our decarbonisation and net zero targets.
"It will give people the opportunity to travel to and from Levenmouth more sustainably and by including active travel links, we can encourage greener end-to-end journeys."
Alex Hynes, managing director of Scotland's Railway, said:
"Scotland's Railway has a great record of opening new stations and new lines, which help to drive further investment in communities and create new opportunities for local people.
"Construction of the new Levenmouth Rail Link is a major step towards transforming travel in the local area by creating new transport hubs connected to communities by active travel routes to enhance connectivity.
"But more than this, it has the potential to improve social and economic conditions and deliver opportunities for jobs, education, recreation and tourism and make a real difference to people's lives.
"We are committed to working alongside the Scottish Government to open up our railway to as many communities as possible across Scotland and look forward to adding this new line onto the rail network."
Fife Council Co- Leader, Cllr David Alexander, said: "We're delighted work has started to return the rail line to Levenmouth. This link will increase employment opportunities, as well as improve access to education, health and leisure services for the whole area.
"Fife Council is committed to improving life-chances for all, and this means providing local jobs for local people and improving connectivity and regional transport.
"It's exciting times for Levenmouth. There's been a lot of hard work going on in the background and now we'll start to see Levenmouth's connected' future start taking shape."
Fife Council Co-Leader, Councillor David Ross added: "As a Council we're in full support of this project. It's critically important because by improving transport to the area we'll unlock growth, jobs, tourism and new housing.
"Our Levenmouth Reconnected Programme will maximise the economic and social value of the new Levenmouth railway to the local area - developing initiatives and projects that build on the railway investment-led opportunity. The aim being to benefit people already living here and attract new business, investment and visitors from elsewhere."
