 It was built in 1889, at a cost of £88,661/2/11, by contractors by Kenny Bros. as part of the Yea to Cathkin section, but construction was delayed by accidents.Tarrawarra Tunnel was built on the Healesville line, when the Lilydale-Melbourne railway was extended from Yarra Flats (now known as Yarra Glen) to Healesville.A 1 in 40 (2.5%) climb up to the 154.4-metre tunnel and a corresponding descent was required.