The agreement will allow IAIS to begin signal system design work, as well as tie replacement and track upgrades, on 53 miles of right-of-way in Illinois between Wyanet and Moline. The Quad Cities routes stretches roughly 162 miles.
Construction also is expected to begin next month on another part of the connection, at the BNSF Railway's Eola Yards in Aurora, Ill., according to state officials.
"This agreement is another significant milestone in re-establishing passenger service between two great Illinois cities," acting Illinois Transportation Secretary Erica Borggren said in a statement.
Cedar Rapids, Iowa-based IAIS is part of Pittsburgh-based Railroad Development Corp., owner of several short lines; its founder, Henry Posner III, is well-known as an advocate of U.S. passenger rail development.
The Quad Cities project also has been awarded $230 million in federal funding. Amtrak revenue service on the route initially was supposed to commence in 2013, but has been postponed, with no specific target date now set. But an Illinois DOT spokesman said the start of service and construction timeline will be announced following the completion of planning work before the end of the year.