The 389km railway line will connect northern Ethiopia with the country's central region.
A senior Ethiopian government official Tedros Adhanom, who held bilateral discussions with his Turkish counterpart Mevlut Çavuşoğlu on September 29 in New York, said the project was part of efforts to improve infrastructure in the country.
He said the Awash-Woldia railway, expected to be mainly financed by Turkish EXIM Bank, was one of the major projects.
Ethiopia's Foreign Affairs ministry on Tuesday said Tedros had asked Çavuşoğlu "to encourage the bank to release the agreed funding of US$700 million".
A contract between Ethiopian Railways Corporation and Turkish YAPI MERKEZI for the construction of the railway project was signed a couple of years ago.
Tedros also commended the Turkish government's efforts in bringing more investors to Ethiopia, the statement said.
Turkish investors, this year, surpassed China in terms of investments in Ethiopia.
China has invested $836 million in Ethiopia over the past 10 years, while Turkey has put in $1.2 billion worth of investment into Ethiopia, so far.