Construction on Crossrail is due to start in 2010
MPs have approved a bill which paves the way for the £16bn Crossrail project to go-ahead.
The rail scheme will link Maidenhead in Berkshire to Shenfield in Essex via Heathrow airport and central London.
A number of new stations are being built in the largest civil engineering project in Europe. The first trains are expected to start running in 2017.
The Crossrail bill received Royal Assent on Tuesday night after a three-year passage through Parliament.
Crossrail was first approved in 1990 but shelved a few years later.
The scheme to create an east-west rail route across London is the biggest transport project in the UK since the construction of the Channel Tunnel.
The trains will carry an estimated 78,000 passengers an hour during peak hours.
The hybrid bill was first introduced in February 2005 and is used for projects of national importance which affect the private interests of particular individuals or organisations.
Transport Secretary Ruth Kelly described the scheme as being of "major significance" to both London and the country.
"It will generate jobs and economic growth, help revitalise some of our most deprived areas and deliver major improvements for the travelling public," she said.
London Mayor Boris Johnson said it was a "cracking deal for the capital".
"Crossrail will shorten journey times for Londoners and visitors to our city, whether they are heading for the bright lights of the West End or the citadels of commerce at Canary Wharf," he said.
Once complete, it is expected to provide a £20bn boost to the UK economy.
Dr Helen Hill, policy director at the London Chamber of Commerce and Industry, said: "London businesses will be relieved that the Crossrail Bill has now passed through Parliament.
"Crossrail is worth billions to the UK economy and is essential to increase capacity on the capital's overstretched transport network."
Union leaders said the route "makes sense from every angle" but warned past privatisation "failures" must not be repeated.
Meanwhile, a £4.5bn private-sector plan to extend the Channel Tunnel high-speed rail link to Heathrow has been presented to the government.
Engineering company Arup said the airport could be the first stop in an extension of High Speed 1 which runs from central London to Folkestone in Kent.
To be completed by 2019, the extension would link with local rail services and would involve tunnels from central London to Heathrow.