The Māori Party wants to develop a nationwide train network which it says would bring thousands of jobs to the regions.
The IwiRail policy would initially focus on bringing back the moth-balled Napier-Gisborne rail line before targetting similar depleted routes.
The party said the National Party's current transport policy favoured investment into roads in Auckland and other big cities, without plans for upgrading and expanding regional infrastructure.
Co-leader Marama Fox said IwiRail would work separately from KiwiRail and getting local iwi involved would ensure the regional lines were successful.
"Those lines that have been taken under the Public Works Act were taken from Māori. We need to put that back in the hands of Māori."
Ms Fox estimated it would cost around $6.5 million to fix the Napier-Gisborne line.
"We've talked to the producers in the Gisborne region, they believe we can get a profit off these lines by helping them get their produce to market and they're committed to doing it."
The route would also give access to the top of the East Cape, opening up an untapped tourism market, Ms Fox said.
"It is no coincidence that we are putting money from the recent budget into Māori tourism because it is an untapped market. We can't even get people up to the coast because the roads are so bad.
"We will open a whole new space and new job creation, and iwi own that land so it will be iwi who will be driving those businesses as well."
Ms Fox said local iwi in Gisborne have told her this is something they want to be part of.
Other private investors have also shown interest in being involved, she said.
IwiRail would also require $100m a year from the government's transport fund and an initial investment of $350m.
Māori Party president Tukoroirangi Morgan said they also had other initiatives that would bring in more jobs.
"We will guarantee jobs for local people and address unemployment by reintroducing rail sector wage and job training subsidies - a policy that worked in the past when our people manned the rail, drove the trains and built the railways."
The Māori Party said it has had informal talks with the government who said they were "interested" in the scheme.
Co-leader Marama Fox said the party does not engage in bottom lines in coalition talks.