Providing better services for passengers will be at the heart of its work, transport minister Nicol Stephen said.
As set out in the Partnership Agreement, the new agency is intended to:
* Advance and co-ordinate delivery of improvements to Scotland's transport infrastructure such as rail links to Glasgow and Edinburgh airports and the Aberdeen Western Peripheral Route
* Promote reliable and efficient services for transport users, with better information for passengers and integrated ticketing
* Co-ordinate a free national concessionary fares scheme for the elderly and those with disabilities
* Develop close links with regional transport partnerships and local authorities
Mr Stephen said:
'After decades of under investment, we now have the resources in place to make a real difference to the quality of transport in Scotland. The focus of the new agency will be to make certain we deliver.
'The people of Scotland deserve a high quality transport network. We must get goods to market quickly and move passengers safely and reliably. An integrated transport network connects our communities and drives the economy. People are at the centre of our transport vision.'
Mr Stephen launched the consultation during a visit to the Ferry Toll Park and Ride at Inverkeithing where the Executive has invested more than £8m to double the number of parking spaces to 1,000.
'By 2006 we will have £1bn a year to spend and we need to make sure that it is spent effectively. Our focus must now be on delivering the benefits of that investment f or passengers.
'The new agency will be a centre of excellence with the staffing expertise and experience needed to manage large and complex projects such as new rail links.
'Over the next few months I look forward to hearing the views of transport operators, providers, local authorities and members of the public on how we will best do this.
'Working together will be crucial to our success. Local authorities, the regional transport partnerships and the Executive will all have an important role to play in bringing these improvements forward.'
The consultation will close on 17 December. A number of public meetings and workshops will be held throughout Scotland with a national transport conference to be hosted by the Executive in November.
A new email address will also allow respondents a direct say at firstname.lastname@example.org
The consultation proposes that Transport Scotland is set up as an Executive agency, with a chief executive directly accountable to ministers.
Examples of other Executive agencies include Historic Scotland, the Scottish Prison Service and Communities Scotland. It is expected that the new agency will come into effect in April 2005.
The Executive awarded £8.075m to Fife Council to allow doubling the amount of parking spaces available at Ferrytoll park and ride site (from 500 to over 1,000). The project forms part of a successful bid by SESTRAN to last year's Public Transport Fund.