The green light has been given for work on a new multi-million pound freight link between the Port of Liverpool and the West Coast Main Line.
The rail line has been closed for about 20 years
Merseytravel's Olive Mount Chord project involves reopening a disused stretch of railway, linking Bootle with London and Manchester.
The line, about a quarter of a mile long, has been closed for 20 years.
The £7.9m project will help move freight in and out of the docks more quickly, a Merseytravel spokesman said.
The new link will remove the need for freight trains to reverse at Edge Hill and cross lines into and out of Lime Street station.
Councillor Mark Dowd, Chair of Merseytravel and also a former train driver, said the new link would also reduce the number of heavy vehicles passing through the Bootle from the motorway junction at Switch Island.
The project is due to for completion by the end of 2008.
Merseytravel has already approved its £2.1m contribution to the project, which is also supported by Network Rail, the Northwest Regional Development Agency, Merseyside's district councils and the European Regional Development Fund.