The Government has secured funding from the European Investment Bank for a Luas link-up project in Dublin, which is set to create 800 construction jobs.
The plan will see the meeting of the Red and Green lines as well as carrying the line further north to link with the Connolly/Maynooth rail line.
The estimated loan of €163m from the EIB, which is just under half of the cost of the development, will be repaid at a lower rate of interest, saving the country and taxpayer more than €30m.
Around 800 jobs will be created in the construction phase of the project, while 60 permanent positions will be created on completion.
Transport Minister Leo Varadkar says the project will provide a more efficient rail network.
"So what it really does is bring together all the rail networks in Dublin, and will make all sorts of journeys possible that aren't possible now," he said.
"To give you two examples, you'd be able to get on the train at Maynooth or Leixlip and get out on the Luas in Dundrum, you’d be able to take the Luas from Heuston Station to Trinity or even take the Luas from Sandyford to the O2."
"This project shows that even in tough times, real progress can be made. Close cooperation with the EIB has already facilitated a number of earlier LUAS road projects in Ireland, and I’m delighted that it’s now involved in LUAS Cross City."
Jonathan Taylor, European Investment Bank Vice President responsible for lending in Ireland said: "The European Investment Bank recognises the importance of linking the two LUAS lines to unlock public transport across Dublin.
"Approval by the EIB Board is a key milestone in our examination of this project and follows a positive appraisal of the schemes contribution to improving transport in Dublin by the banks experienced transport team.
"We look forward to finalising legal and financial details over the coming weeks."
The European Investment Bank agreed to provide €75m for the N11 – N7 motorway link in April 2013 and is currently examining support for the N17-N18 Gort to Tuam improvements.