The Metrowest Phase One project is being led by North Somerset Council and the West of England Combined Authority.
The plan involves reopening a three mile railway line from Portishead to Pill and further works to a 5.6 mile stretch of operational railway from Pill to Parson Street.
The DCO application seeks powers to build and operate the disused section of railway from Portishead to Pill, gain environmental consent to undertake works to the existing freight railway through the Avon Gorge and obtain powers for the compulsory acquisition of land.
According to a statement issued by North Somerset Council, among its benefits, the scheme would bring "more than 50,000 people within the immediate catchment of the two new stations at Portishead and Pill."
It also said that the scheme would provide "better access to employment and educational opportunities" and would see "181,000 fewer car trips in the opening year, increasing to 278,000 fewer car trips a year by 2036."
The council added that, subject to approval, construction work is expected to start in December 2021 and take around two years to complete.
A second phase of the project would involve upgrading the Henbury freight line to allow passenger services, with new stations at Henbury, North Filton and Ashley Down.
In April, the government confirmed £31 million of funding for the phase one project.