Tánaiste Simon Coveney has said the possibility of a Luas-style transport service for Cork will be explored, but the "numbers have got to stack up".
Mr Coveney said there was a likely route in mind and he would like to see it happen, but the proposals had to be assessed for viability.
The possibility of a light-rail system for the city is included in the Government's Project Ireland 2040, which commits to investigating the potential for such a service. In a round-table interview, Mr Coveney said: "I think those of us who know the city well know the route it will likely to be on".
He suggested it would link the docklands, Ballincollig, the city centre, the main hospitals and the high density urban and residential parts of the city. Mr Coveney said University College Cork and Cork Institute of Technology would also be connected.
The Cork South-Central Fine Gael TD said: "In the meantime, a significant amount of money has been committed for a BusConnects project in Cork to ensure we increase the number of buses and ensure we increase the bus transport system".
"I think everybody in Cork would like at some stage in the future to see a light-rail system, certainly I would. But the numbers have got to stack up, of course, and I think there's work to do to assess the viability and potential of that before we commit the significant resources that will be required."