SYDNEY (REUTERS) - Australia has approved a second airport for Sydney, in the government's latest move to improve the infrastructure in the country's biggest city, Prime Minister Tony Abbott said on Tuesday.

Abbott, who took office late last year, has said he wanted to be known as an "infrastructure prime minister", targeting infrastructure to counter a hit to economic growth from Australia's fading mining investment boom.

The coalition government has made "a long overdue decision"and confirmed the site for Sydney's second airport will be Badgerys Creek in Western Sydney, Abbott told reporters in Canberra. "The planning and design work will start immediately, and my expectation is that construction will begin in 2016," Abbott said.

Sydney now has only one airport in the city's east, and talks for a second airport have gone on for more than 50 years. "It is essentially going to be an infrastructure package for Western Sydney, a long overdue infrastructure package for Western Sydney, that does also involve an airport," Abbott said.

Most of the cost of the new airport will be funded by the private sector and it is expected to see its first flight in the mid-2020s, Abbott added.

Australia's flagship airline Qantas Airways Ltd said in a statement it welcomed the government's decision to build a second major airport in western Sydney.