At present, the Sydney Harbour Bridge and tunnel carry most of the traffic between the north of the city and the Olympic Park.

Tendering for the US$11 billion project is under way and work is expected to begin next year with a view to completion in 2026.

The Western Harbour Tunnel and Warringah Freeway Upgrade, as the project is called, will have six lanes, and double-bore tunnels built in a trench on the harbour floor using prefabricated concrete tubes.

A shortlist of three teams was announced in December, consisting of US engineer Bechtel Infrastructure, UK contractor Laing O’Rourke and a consortium called Harbour West Partners, made up of Australia’s Macquarie Capital, US engineer Jacobs and UK project manager RPS Group.

Andrew Constance, the New South Wales transport minister, said the tunnel and motorway would cut 20 minutes off average journey times.

He commented: “This city-shaping piece of infrastructure will deliver a vital boost to the NSW economy, with the tunnel and freeway upgrade, along with Beaches Link, expected to support around 15,000 full-time equivalent jobs.”

He added: “The Western Harbour Tunnel will take pressure off the Sydney Harbour Bridge, Sydney Harbour Tunnel, Anzac Bridge and Western Distributor corridors to revolutionise transport capacity in and around our city.”