A funding announcement by the premier Tuesday morning ensures the process of building the southeast leg of the LRT can begin this spring says Mayor Don Iveson.

Iveson, who said he was disappointed by the lack of funding for the project in the provincial budget, described the occasion as “momentous”.

"This allows us to keep the timeline. We are able to go out to the market this spring and start to seek bidders to build this project," said Iveson following the announcement at the Churchill LRT Station.

The southeast leg of the LRT known as the Valley Line is estimated to cost $1.8 billion.

The city has committed $800 million to the project, and has been counting on the federal and provincial governments to provide the rest.

After months of lobbying, the premier finally made a firm commitment to the project totaling $600 million.

"I am pleased to announce the second call for GreenTRIP will begin on April 15 because Edmonton told us that we needed more, our capital caucus told us we needed more, and we listened," said Premier Alison Redford during the press conference.

Here’s how the funding contribution breaks down:

  • up to $250 million under GreenTRIP over three years beginning in 2016-2017 upon approval under the second call for GreenTRIP projects
  • up to $150 million in matching provincial funds if the federal government approves the project under the new Building Canada Fund beginning in 2016-2017
  • up to $200 million in the form of an interest-free loan to be repaid by the city over 10 years

Councillor Ben Henderson says a loan isn't ideal but still calls it "good news".

"It allows us to move forward and I think we should move forward," said Henderson. "It would have been nice if it would have come with less strings attached in terms of that final $200 million, and we could have known, because it's not that we can't afford to cover that in the long term but it'll cut into our ability to move forward with the next piece of the puzzle after this one."

Shovels on the Valley Line, connecting Mill Woods to downtown, are now expected to hit the ground by late 2015.

Following the announcement, Councillor Amarjeet Sohi described his mood as "elated".

"This is a great day for us to move forward on building a system that people in Mill Woods and southeast have been waiting for for 40 years."

Mayor Iveson says he's hopeful the Valley Line will be open by 2020.

With files from Brenna Rose and Serena Mah