The ambitious 11 kilometre tunnel on the Great Western Highway would link Medlow Bath to Little Hartley west of Sydney.

If built it would be the final stage in the NSW government's planned 130km upgrade of the highway between Katoomba and Lithgow.

The NSW government has already committed $2.5 billion to upgrade the Great Western Highway.

Deputy Premier John Barilaro said the proposed tunnel would better connect the state's Central West to the east coast.

"We have already committed to tunnels at Blackheath and Mount Victoria - this proposal would see those tunnels joined together, creating the longest road tunnel in the country," Mr Barilaro said.

The proposal was ambitious and complex but the government was "working hard to make it happen" for commuters, regional businesses and freight companies and holiday makers.

Roads Minister Paul Toole said the proposal would link the two tunnels already planned for Blackheath and Mount Victoria.

"We've already committed to a 4.5 kilometre tunnel to bypass Blackheath and a four kilometre tunnel underneath Victoria Pass, one of the steepest roads in NSW," he said.

"We're now investigating connecting those two proposed tunnels into one longer tunnel. This would be a history-making project, delivering Australia's longest road tunnel," he said.

The eastern entry would be on the outskirts of Blackheath to minimise the impact on local homes and be built in a section of National Park land to the south of Evans Lookout Road.

Neither portal would impact the Greater Blue Mountains World Heritage Area.

Mr Toole said heavy traffic over the Easter weekend had reiterated the importance of the Great Western Highway upgrade and safe, reliable connections over the mountains for locals and travellers alike.

It would deliver dual carriageway in both directions for more than 100km.

"Should our investigations into a long tunnel determine that it isn't viable, the community can be assured that we would proceed with a tunnel at Blackheath and a tunnel at Mount Victoria," he said.

Construction on the Great Western Highway upgrade was expected to start at Medlow Bath in 2022, with the full upgrade to be completed within a decade.

Labor's roads spokesman Mick Veitch called on the government to detail how it would fund the "pie in the sky" project.

"Will it be another toll road? The estimated $8 billion figure could be as high as $20 billion if the project is ever completed," he said.

Australian Associated Press