The government and mayor of London have agreed financing for the next phase of the East London Line development to improve the capital’s transport links.
The orbital rail line will provide direct links between Clapham Junction in the south of the city with the Docklands area and the City, boosting connections with some of the country’s prime locations for commercial property.
Under the plans, £75 million will be put towards the development, which will ensure the project is completed by 2012 and should help to improve opportunities for commercial property in London by increasing the access to areas such as Canary Wharf and the Olympic sites in Stratford.
Describing the agreement as "tremendous news", mayor of London Boris Johnson said: "We can finally get cracking on a vital section of track that will orbitise our Overground rail services."
Transport secretary Geoff Hoon, announcing the additional funding of £64 million, said: "The East London Line extension will deliver a key rail link south of the river and improve local transport for Londoners by providing more choice and better access to other parts of the capital."
Last week, Mr Johnson announced that he planned to use the Olympic Games in 2012 to attract more businesses to offices in London.