The first stage of the M6 motorway - previously known as the F6 - has received formal planning approval.
Planning and Public Spaces Minister Rob Stokes announced approval of the Transport for the NSW project following consideration of matters raised in the environmental assessment.
Mr Stokes said a contract would be awarded in December 2020, with construction to begin by early 2022 and the road to open to motorists by the end of 2025.
The four kilometre twin tunnels from the New M5 motorway at Arncliffe to President Avenue, Kogarah, are projected to cut 15 minutes off the time of the present journey.
"This project will see more than 2000 trucks a day taken off local streets, bypass 23 sets of traffic lights, and create thousands of construction jobs," Mr Stokes said.
"While the tunnel will provide a safer, shorter, more reliable drive between the CBD and Sydney's south, above ground it will also provide improved access for cyclists and pedestrians."
The project includes a new shared cycle and pedestrian pathway through Brighton Le-Sands including a bridge over President Avenue linking Rockdale Bicentennial and Scarborough Parks.
The government announced in August this year it was calling for expressions of interest from companies vying to build stage one pof the project.
Premier Gladys Berejiklian also revealed the completion date had been put back a year.
The government had consistently said the project would be opened by the end of 2024.
A spokesman for Transport for NSW said in August the revised timeframe was to enable new community and sporting facilities to be built.
"When the project was announced in June, 2018, it was in the very early stages of the planning process," he said.
"Since this time, the environmental impact statement was publicly exhibited and all submissions were reviewed to further refine the design based on the valuable feedback we received," he said.
"Before construction of the M6 Stage 1 commences, the NSW Government will be investing $20 million into new and upgraded community and sporting facilities to enable the local community and sporting groups to continue playing without interruption.
"The revised timeline allows for the construction of these new and upgraded facilities to commence in mid-2020 and be completed before construction of the motorway commences in early 2022."
