The Hyperloop transport system, best described as a tube hurling passenger capsules to their destinations at over 1,000 km/h, took its first step towards becoming a reality in the United States.

Hyperloop Transportation Technologies has signed an agreement with a firm in central California to build a five-mile long Hyperloop test line along Interstate 5. Hyperloop Transportation's deal with the developers of Quay Valley will see construction of the test line starting in 2016.

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The test line is to be completed by 2019 and could cost some US$100 million to build.

"This is big step," said Dirk Ahlborn, CEO of the JumpStartFund that established Hyperloop Transportation Technologies in 2014. "It's time to take the Hyperloop from concept and design and build the first one."

Ahlborn described his company's actions as a phased process. They've completed their feasibility studies and will now test all aspects of the Hyperloop. The company is at least 10 years away from a commercially operating Hyperloop, however.

The Hyperloop gained media mileage when it was put forward in 2013 by Tesla Motors and Space Exploration Technologies founder Elon Musk. Musk last year announced plans to build a Hyperloop test track in Texas after first saying he had no plans to do so.

Two other firms are interested in building a Hyperloop system. Musk has agreed to fund the construction of a sub-scale test track in Texas. A third firm, Hyperloop Technologies of Los Angeles, plans to develop a Hyperloop route between San Francisco and Las Vegas. It has US$8.5 million and is backed by a dream team of investors from Silicon Valley.

The Hyperloop is a conceptual high-speed transportation system incorporating reduced-pressure tubes in which pressurized capsules ride on a cushion of air driven by a combination of linear induction motors and air compressors.

The conceptual route runs from the Los Angeles region to the San Francisco Bay Area. The expected journey time is expected to last 35 minutes.

This means passengers will traverse the 354 mile (570 km) route at an average speed of some 598 mph (962 km/h) with a top speed of 760 mph (1,220 km/h). Once completed, the Hyperloop line could extend for over a thousand miles.