The railway was built for the haulage of brown coal and overburden between the Yallourn open cut mine, briquette works, and power station.
The Morwell Interconnecting Railway (ICR) was later constructed, linking the Yallourn mine complex with the Hazelwood open cut, briquette works, and power station.
The Yallourn railway commenced operation with the power station, being replaced by conveyor belts in 1984.
The ICR was replaced by diesel locomotive haulage in 1993,[1] with railway operations ending in October 2000 and the track was lifted between September and December 2001.
A locomotive and coal wagon from the line are preserved at the Newport Railway Museum.