Gov. Kathy Hochul, Transportation Secretary Pete Buttigieg, Senators Charles Schumer and Kirsten Gillibrand announced the latest money as they toured the site Friday.
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This next phase will build the concrete casing for trains to pass through under Hudson Yards on the West Side.
Work is also beginning this month on the New Jersey side, with the realignment of a highway for digging of the tunnel.
Digging of the actual tunnel is expected to begin in 2025. Two giant boring machines will cut way through a cliff, under the river and straight into Manhattan. The new tunnel is scheduled to open 10 years later.
It is the restart of a construction project that initially began more than 15 years ago, but came to a grinding halt when then-New Jersey Gov. Chris Christie pulled the state's money.
Two years later, Superstorm Sandy hit which accelerated the deterioration of the two existing tunnels.
The existing tunnels are more than 110 years old. NJ Transit and Amtrak trains are frequently delayed or canceled altogether by signal failures and problems with the overhead wires that leaver commuters no alternative.
"We toured the tunnels, we saw how the seawater that had come in during Sandy is corroding the and damaging the tunnels even a decade later and that's causing regular delays," Buttigieg said.
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Their poor state of repair has made them an issue in the ongoing battle between New Jersey and New York over congestion pricing, with Gov. Phil Murphy saying the controversial plan cannot go forward without more reliable mass transit options.
Even with the project now fast-tracked, it will still take more than a decade to build the new two-track Gateway Tunnel. And even then, the new tunnel's opening would be to facilitate the rehabilitation of the old tunnels.
Gateway is a favorite project of Sen. Schumer, and it has received renewed attention from the current administration. President Joe Biden is a lifelong Amtrak rider.
Both Biden and Buttigieg have visited the tunnels to make them a priority. In January, Biden announced the federal government would provide $292 million for the concrete casing that is about to be built, calling it the "beginning of finally constructing a 21st-century rail system."
Nine months later, work is about to start.
The Gateway Tunnel Project is now the largest infrastructure project in the country.
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