Bow Street station, on the Cambrian line north of Aberystwyth, was closed in 1965 as part of the Beeching cuts.
The Welsh Government is seeking £6.8m from the UK government to cover three quarters of the cost of a new station.
Mid and West Wales AM Eluned Morgan said there was a "very strong" economic case for the project, with a new university campus opening up.
"Rail infrastructure is crucial to opening up the connections to Aberystwyth and beyond," she said.
"There is a welcome upturn in economic activity in the area, including the new Aberystwyth University campus nearby.
"This rail stop will cut down on traffic, promote business, reduce pollution, provide a vital transport system for commuters and the elderly."
The Welsh Government has applied for a £6.8m grant for part funding from the UK government for the project which would include a new train station and interchange plus car parking and bus stops.
Economy Secretary Ken Skates said he had submitted a "strong" application for 75% of the cost of the new station - the maximum the UK Government could cover.
He said the Welsh Government would provide the remaining 25% of the funding - £1.7m.
Proposals for a new station at Bow Street have been shown at a public event and, if approved, is hoped will open in 2019.
It would be built a short distance south of the original station, which is now the site of a builders' merchants.
A spokesman for Ceredigion council said it had found "considerable support" for the scheme in consultation.
The authority expected to hear the outcome of the funding application early in 2017.
Ms Morgan said she also hoped Welsh ministers would also consider reopening Carno station, also on the Cambrian line, in Powys, which closed in 1963.
A new railway station in Ceredigion would have a big impact on the regional economy, a Labour AM member says.