An application for £6.8m has been made to the UK Government for a station and interchange, including parking and bus stops, at Bow Street near Aberystwyth.
The Welsh Government has provided £1.7m, including expenditure, to date.
The station closed as a result of the Beeching cuts and there have been campaigns for it to be reinstated.
Proposals for a new station have been shown at a public event and it is hoped it will open in 2019.
Economy Secretary Ken Skates said: "We've been working very closely with the local authority, local interest groups and the railway industry to ensure that proposals result in the station and interchange development starting on the ground in April 2018."

Arcan Cetin, 20, who had been awaiting trial for the mass shooting in 2016, was found dead in the Snohomish County Jail on Sunday night.
He had been charged with five counts of aggravated murder, and could have faced the death penalty if found guilty.
Authorities have not yet determined the cause of death.
According to investigators, Cetin shot five shoppers at a Macy's department store after first trying to enter through the backdoor of a nearby cinema.
The shooting spree at the Cascade shopping mall occurred less than three hours after he had sat down for dinner with his stepfather.
Surveillance footage from inside the mall shows the suspect opening fire on four woman and one man as they browsed the store.
Police say Cetin was inside the mall for less than one minute before he fled the store, leaving the .22 calibre rifle, which police say had been stolen from Cetin's stepfather, on a counter in the cosmetics department.
He was arrested about 30 hours later as he walked near to his apartment in Oak Harbor, Washington, according to local media.
Prosecutors said he confessed to the shootings, but that he did not reveal a motive.
The victims - Sarai Lara, Shayla Martin, Belinda Galde, Beatrice Dotson, and Wilton Eagan - ranged in ages from 16 to 95 years old.
Court records show that one year before the shooting Cetin was ordered by a judge to receive mental health treatment after a violent altercation with family members.
After attempting suicide, he was involuntarily committed to a mental hospital.
He had been identified by doctors at the time of having a serious risk of self-harm, and had been receiving court-mandated mental health counselling in the months before the shooting.
Cetin was born in Turkey, but had lived in the US since the age of six.
A village in Ceredigion could soon have a new railway station if the Welsh Government is successful in its funding application.
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A man accused of killing five people at a shopping mall in Washington state has been found hanging inside his prison cell, say officials.