The agreement, which would enable the trust to put in an easement and establish boundaries for a cycle track, was a "significant step".
"This is a huge step forward, it really is. We have been trying for years to get to this point."
The trust hoped the agreement would enable the track to open ‘‘as soon as possible". While the trust had pushed for the development of the tunnel as a cycleway since 2005, property access issues had prevented the project from going ahead.
The purchase of the Gladstone Rd property would enable the potential of the tunnel as a track to be realised, Mr Hyland said.
"Access through the Chain Hills Tunnel will enable a relatively flat 4km cycling and walking track connecting Abbotsford and Wingatui, opening up safe and active travel opportunities for schoolchildren, families and recreational users."
The trust now had three months to raise $550,000 to confirm the deal with Mark and Jillian North, the owners of the Wingatui property, Mr Hyland said.
Mr North said he had enjoyed living in the property. However, selling it to the trust was "the best thing to do for both ourselves and the local community".
The $550,000 would cover the purchase of the property, the cost of putting in an easement and maintenance costs until the property was on-sold.
It was hoped the property would be on-sold as soon as the easement and new boundaries were established to avoid unnecessary additional costs.
Mr Hyland hoped $450,000 would be generated in interest-free loans and $100,000 in donations by mid-April.
In November about 400 people attended an open day at the 462m tunnel which was decommissioned following a rail line change in 1914.
Design work with Kiwirail to ensure the fencing and surface condition of the trail was adequate for public use would now begin.
The trust also planned to reopen the old Caversham rail tunnel to create a track between the city and Taieri Plain which would avoid all roads, motorways and hills.
