The scheme forms part of an ambitious £1.5bn inward investment programme revealed by the council, which outlines a 20-year plan for major transformation of the town.
London Luton Airport has appointed Arup to design and procure the scheme, with a planning application set to be submitted in autumn. Work could begin in 2017 with the system ready for operation by the end of 2020.
The preferred 2.2km route runs between two purpose-built stations, heading out from Stirling Place where a new commercial development and multi-storey car park is also planned, alongside the mainline railway and crossing over Airport Way before passing through the airport’s existing mid-term car park and arriving at the airport’s central terminal area.
The link to be funded by the council, which owns the airport, would reduce journey time to London to just 30 minutes.
Construction is already well under way on the airport’s separate £110m redevelopment plans.
The Council also revealed it is working in partnership with major investors and developers to transform the town over the next few years with several major developments.
Luton has eight major strategic development sites offering retail, leisure, hotels and housing opportunities and large sites for engineering, technology, creative and aviation-linked employment.
Among these are mixed-use developments at Napier Gateway (J2 Global), Butterfield Business Park (Henry Boot Developments), High Town, Sloane International luxury apartments and Power Court (British Land).
2020 Developments, the company behind Luton Town Football Club, is also planning a new football stadium and associated enabling development to regenerate the town.
Capital & Regional, the owner of 1m sq ft The Mall shopping centre in the heart of Luton, also plans to expand.
Cllr Sian Timoney, Deputy Leader of Luton Council, said: “The time is absolutely right for Luton following significant investment in supporting infrastructure at Junction 10a, the Luton Dunstable Busway and the Luton Town Centre Transport Scheme.
“We have partnered with a number of respected international developers and investors in ambitious development plans with more than £1.5bn investment potential.”