Transport minister Melanie Schultz has agreed to invest nearly one billion euros into putting one kilometre of the Amsterdam ring road underground.
The stretch of road which bisects the Zuidas business park will also be made wider to ease traffic congestion. Amsterdam Zuid railway station will also be enlarged and modernised. However, plans to build on top of the tunnel have been abandoned, Nos television reports.
The total cost of the project, due to start in three years time, is put at €1.4bn. Amsterdam city council, the regional authority and province are funding the tunnel alongside national government.
The Parool newspaper says the plan will be bad for the southern suburb of Amstelveen because extending the north-south metro line will no longer be possible when the tunnel is built.