A complete refurbishment of the track between the up-and-coming City Of Culture, Londonderry and the town of Coleraine has also been put back for at least five years.
However, transport holding company, Translink said it was committed to developing the route - said to be one of the most scenic in the British Isles - despite the evident completion date 'slipping'.
It means that the direct rail service between Northern Ireland's two largest cities will be diminished during part or all of Derry's year as UK City of Culture in 2013.
Translink had hoped to begin work on completely relaying the line in 2012 but the £75m needed is not currently available. The completion date has now been put back to 2016/17.
Now, it plans to carry out some essential safety improvement work on the line, which will cost about £4m.
Commenting, Alliance Coleraine Councillors Barney Fitzpatrick and Yvonne Boyle have expressed their worry over the future of the railway line - that passes picturesque areas such as Benone, (pictured by Brian McCalden) - after it emerged that a third of the services will be replaced by a bus substitution service for the two years of proposed safety work.
They are also worried because Translink also announced that there would not be any upgrade work carried out on this stretch until 2015/16.
Cllr Barney Fitzpatrick said: "I am extremely worried that this lack of support for this line from Translink.
"I am even more disappointed after they previously discussed with politicians their plans for upgrading the Coleraine to Derry line, but three years down the line, nothing has been done by them.
"I am calling on the Translink to invest in this line to avoid any economic damage being done to the region if we lose this section," he said.
Cllr Yvonne Boyle said: "This line has been described by [writer] Michael Palin as one the most beautiful railway journeys in the world, so it will be disappointing that less people will be able to travel on this section.
"In terms of tourism, I am concerned that this decision could harm tourist numbers especially at a time when we are trying to attract people to the North West ahead of Derry being the City of Culture in 2013," she concluded.
(BMcC/KMcA)
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