The final business case for Edinburgh's proposed tram system predicts the project will cost significantly less than amount already available.
It calculates the route through the city from Newhaven to Edinburgh Airport will cost just under £500m - £47m less than the funding already allocated.
There is an option to build a second route between Haymarket and Granton at a fixed price until March 2009.
Councillors have the final say on the plan on Thursday 25 October.
The final business case has been prepared by Transport Initiatives Edinburgh (Tie), an independent company set up by Edinburgh City Council.
Willie Gallagher, Tie chairman, said: "I am particularly pleased that our commercial negotiations and rigorous procurement strategy have enabled us to cost the delivery of the tram line from Newhaven to Edinburgh Airport at £498m, including contingency; well below the £545m available funding.
"Once we get the final go-ahead to build trams, Edinburgh's residents, businesses and visitors can look forward to reaping the enormous benefits that modern tram systems have brought to other major cities around the world."
Jenny Dawe, leader of Edinburgh City Council, said: "The report is evidence of the rigorous scrutiny that has been applied to the business case for trams.
"The council will, of course, give sustained and proper consideration to these reports.
"The business case does, however, appear to offer excellent value for money and I am delighted that it supports our vision for Edinburgh's economic success.
Trams disappeared from Edinburgh in the 1950s
"Trams should now become a reality, improving both our competitiveness and the quality of life for Edinburgh residents."
Phil Wheeler, the council's transport convener, said: "The analysis of tram benefits and costs has been meticulous and proves to be undoubtedly positive.
"Within four short years, Edinburgh will have a world-class, modern and efficient public transport system fit for a 21st century capital city."
Neil Renilson, chief executive of Transport Edinburgh Limited (TEL), the company that will run Edinburgh's integrated bus and tram network, said: "Trams will be an exciting addition to Edinburgh's public transport network and the business case confirms that the new bus-plus-tram integrated system will operate without any public subsidy, just as the bus network currently does.
"While we are preparing for the introduction of trams we will continue to invest in the bus network and improve services so that passengers in all parts of the city, whether served by trams or buses, will have a first class public transport service option.
"We are already preparing for the arrival of trams and have recently installed 35 on-street tram-style ticket machines for the purchase of bus tickets."