Work on constructing an extension to the LUAS line in Dublin is to begin next May.
The Cabinet approved the updated business plan for the €370m project at its meeting today.
The BXD line will run from the city centre to the Irish Rail stop at Broombridge on Dublin's northside and will also link the existing Red and Green lines.
Up to 800 jobs are expected to be created during the building phase, with a further 60 permanent jobs when the project is completed in late 2017.
"This is an important step for the Luas BXD project, which will link up the existing Luas lines and give Dublin an integrated commuter rail network for the first time," said Minister for Transport Leo Varadkar.
"Cabinet has discussed the business plan for Luas BXD, and I have now asked the NTA and RPA to proceed with the procurement and contractual arrangements which are necessary to allow the project to proceed in 2013.
"The two Luas lines should have been joined up years ago. It’s a privilege for me as Minister for Transport to be able to finish the job."