The Transport Minister Leo Varadkar will sign the first contracts for work on the new Luas Cross-City line in Dublin today.
For the first time, the Green and Red routes will be joined with an extension to the Irish Rail station at Broombridge.
It is expected that the new 5.6 kilometre line will take four years to build, at a cost of €370m - partly funded with a loan from the European Investment Bank.
Varadkar says it will be a great resource for the city, "making it so much easier for people to get between the two main shopping areas, Henry Street and Grafton Street."
There are expected to be partial road closures and traffic restrictions but Varadkar insists that will be kept to a minimum. He added: "There will be disruption through the construction phase, but we are doing our best to minimise that."