MSPs have approved a bill which paves the way for the new tram line from Edinburgh's city centre to its airport.
They approved the tram (line two) bill by 88 votes to 20.
Another bill allowing a similar line from Ocean terminal in Leith to the city centre is expected to be approved next week.
The Scottish Executive has already committed £450m for both lines and Edinburgh Council is expected to give the final go-ahead later this year.
Both lines are due to be completed by 2011.
Transport minister Tavish Scott described the project as "historic".
"Continuous testing of the business case is critical and we will continue to review the business case rigorously"
He spoke about Edinburgh's thriving economy and said: "This ongoing success brings increased demand on travel.
"The pace of development is outstripping the existing transport infrastructure."
He argued that trams could help ease congestion problems.
The minister said it was right for MSPs to have concerns about the scheme and whether it could be delivered on time and on budget.
"Continuous testing of the business case is critical and we will continue to review the business case rigorously," he said.
However, the Scottish Conservatives said the business case had not yet been made.
Tory transport spokesman David Davidson also said there was a "black hole in the money" for the project.
'Fundamentally flawed'
"We need to know all the costs, the cost of the disruption during construction, the cost to the businesses that may have to close temporarily, the cost to householders," he said.
The SNP said a tram line would only take passengers away from the buses.
Nationalist MSP Kenny MacAskill said the bill was "fundamentally flawed", adding that the money would be better spent on upgrading Waverley station.
He attacked the plans which he said were a combination of the two original proposed routes.
He said the scheme failed to connect where people lived with where they wanted to go.
A spokesman for Edinburgh City Council and Transport Initiatives Edinburgh (tie), said: "This clears the first hurdle towards introducing a high quality tram network to Edinburgh.
"Tie and the council look forward to the final debate next week and hope to hear an equally positive decision."
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