This brings the Tasmanian Government's total investment into the railway over the Budget and Forward Estimates to $36.8 million.
Minister for Infrastructure and Transport, Kerry Vincent, said the funding would help ensure the railway remained a safe, sustainable and high-quality experience for future generations.
"Our investment in the West Coast Wilderness Railway's capital works program is continuing to support this important demand driver for the West Coast," Minister Vincent said.
"We are ensuring the railway continues to operate safely and reliably, while preserving the authentic heritage experience visitors know and value.
"We will continue supporting opportunities to strengthen the West Coast region, delivering significant benefits for local businesses, jobs and the regional economy."
Minister Vincent said the industry was working together to secure the railway's future.
"We have held our inaugural industry roundtable, and there have been subsequent follow-up meetings; the next industry roundtable will be over the winter," Minister Vincent said.
Minister for Tourism, Hospitality and Events, Jane Howlett, said visitors inject $3.6 billion into our economy each year, and this investment will deliver enhancements to the railway's visitor experience.
"The West Coast Wilderness Railway is one of Tasmania's most unique visitor experiences, combining rich history, storytelling and breathtaking landscapes," Minister Howlett said.
"It plays an important role in showcasing Tasmania's rugged West Coast as a destination renowned for authentic nature and heritage tourism experiences.
"The railway continued to go from strength to strength, with passenger numbers on track to reach a record 38,000 this year.
"This achievement follows a record-breaking summer and strong shoulder season for the railway, highlighting its growing appeal to local, interstate and international visitors.
"The railway is a major drawcard for Queenstown, Strahan and the broader West Coast, and we will continue encouraging more people to experience this remarkable part of Tasmania."
The Budget supports the Government's commitment to practical actions that strengthen regional communities, back local jobs and help secure Tasmania's tourism future.