Minister for State Development Ian Macdonald said Rex's decision was great news for Wagga: "The project will also bring over $25 million in investment to the area over five years, plus work for subcontractors and suppliers.

"The academy will train new pilots for Regional Express and other airlines, including airlines in the growing Asia Pacific market and help to reduce the global shortage of pilots."

Mr Macdonald said Wagga Wagga was the ideal location for the academy: "It's midway between Sydney and Melbourne, and with 60,000 residents, the city has the facilities and services that make it one of the most attractive cities in inland Australia.

"Wagga Wagga already has a strong education and training presence with Charles Sturt University, Kapooka Army Recruit Training Base and the Riverina Institute of TAFE providing training for RAAF aircraft maintenance engineers."

Rex currently employs about 100 people in Wagga.

Managing Director of Regional Express Jim Davis thanked the NSW Government for its ongoing support through the NSW Department of State and Regional Development.

"Without the active support of the NSW Government, we would not have moved our flying school from Mangalore in Victoria," Mr Davis said.

"The Government has made it possible for Rex to construct a brand new state-of-the-art flying academy in Wagga Wagga with the ability to produce more than 200 professional pilots a year.

"I would also like to take this opportunity to put on record our profound gratitude to the State Government for their invaluable and significant assistance when Rex first emerged from the Ansett collapse in 2002.

"This was instrumental in ensuring that Rex survived the two initial difficult years. This investment in NSW is our small way of paying back the support we received."