The federal government is going to put $48 million towards a new bus barn for Calgary, the first to be built since 1975.

It will allow the City of Calgary to store and maintain the 400 new compressed natural gas (CNG) buses it's going to be buying.

The city is currently testing four different types of buses that run on compressed natural gas. They're quieter, better for the environment than diesel and more reliable.

Mayor Naheed Nenshi says it will be a new kind of bus facility for the city.

“The new facility will be designed for indoor bus storage; will include the ability to fuel buses with CNG. In fact it will have a direct link into a CNG pipeline.”

A decision will soon be made on a bus supplier — and given how full existing transit bus barns are, it will need a place to store them.

The municipal and federal governments reached a funding deal for a new bus barn which will be built on the city's northern outskirts.

Nenshi says the project will be built as a public-private partnership.

“We went through an extensive value for money analysis on this and determined that a public private partnership was the right way to go on this particular project and so thank you to the federal government, the Government of Canada who are making an important investment in public transit."

Construction of the $200 million facility will start in 2016 and it will open about two and half years later.