The Melbourne Metro Rail Authority will be responsible for the construction of the twin-bore 9km cross-city rail tunnel that the government says will transform Melbourne's public transport system by creating extra capacity through the city centre.

The project, which has an estimated price tag of between $A 9-11bn, has been plagued by political controversy since it was first proposed by a previous Labor government. It was adopted with some major modifications by the subsequent Liberal government, but was dropped for an east-west highway link when up to $A 3bn in federal funding was made available for the road project.

The recently elected Labor government came to power with a key election pledge to drop the east-west road link in favour of a revived Metro Rail project.

"This is the project that solves it all – more services, fewer delays and better public transport," says Victoria state premier Mr Daniel Andrews. "It's the relief valve that ends the traffic jam in the City Loop so more trains can run on every line."

It is estimated the project will create 3500 jobs during peak construction, which also includes five new underground stations to be located at Arden, Parkville, CBD North, CBD South and Domain.

Expressions of interest will be invited next year and major construction will commence in 2018 with funding expected to come from state and federal governments and the private sector.