The Port Authority of New York and New Jersey said Tuesday the first phase of the $1 billion project will start by the middle of 2012 and be finished in 2016.
It will expand the concourse on the west end of the Long Island Rail Road track, beneath the Farley post office building across 8th Avenue.
Port Authority executive director Patrick Foye says NJ Transit riders who now have to walk nearly two crosstown blocks underground will be able to get into the station or above ground quicker.
The project will cost $270 million and is being paid for mostly by federal money.
The second phase will turn the basement of the post office into Amtrak's new terminal.
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