U.S. Transportation Secretary Ray LaHood participated in a ceremony to sign an agreement to provide $1.55 billion to the City and County of Honolulu on the island of Oahu to build Hawaii’s first-ever rail transit system.

The project is expected to shorten commutes in one of the most congested cities in the nation, provide greater transit options to Oahu’s residents and visitors, and create tens of thousands of construction-related jobs.

“The Honolulu rail transit project, the first of its kind in the state, will bring new transit options to the growing region and create a modern transportation system that is built to last for future generations,” said U.S. Transportation Secretary LaHood. “And though, sadly, Senator Inouye cannot be here with us today, this agreement is a testament to his tireless advocacy on behalf of his state and its people.”

The funding agreement seals the federal commitment to the project — a 20-mile rail line with 21 rail stations that will connect riders with key education, employment and activity centers in Honolulu. The rail corridor encompasses West Oahu, Pearl City, Aloha Stadium, Pearl Harbor Naval Base, Honolulu International Airport, downtown Honolulu, and Ala Moana Center, Oahu’s largest shopping center. Honolulu Authority for Rapid Transportation estimates that the project could generate as many as 10,000 jobs annually during construction.

The Federal Transit Administration is providing just less than $1.8 billion in federal funds for the $5.1 billion project, including $1.55 billion through the Major Capital Investments (New Starts) Program, $209.9 million in federal formula funds and $4 million from the American Recovery and Reinvestment Act. Local taxpayers are providing $3.358 billion — about 65% — of the total project cost through a half-percent General Excise and Use Tax surcharge paid by Oahu tourists, residents and businesses.