Plans to operate trolleybuses in Britain for the first time in 44 years have been approved by the government.
The decision means commuters in Leeds could be travelling into the city centre on a network of electrically-powered buses within six years.
Public transport provider Metro said the £254m, 14km (8.7 mile) network would "provide a major economic boost" for the city.
Transport Minister Sadiq Khan said the scheme would ease congestion.
Metro hopes the network will be operating by 2016, 44 years after Bradford, the last UK city to use trolleybuses, shut its system in 1972.
The trolleybus plan has been granted "programme entry approval", which allows Metro to draw up detailed plans for the scheme.
A public inquiry will then be held in 2011 and construction could start in 2013.
The Department for Transport would contribute £235m towards the scheme, with the remaining funding coming from local authorities.
The trolleybus network, which will be called New Generation Transport (NGT), would link two new park-and-ride sites at the edge of Leeds with the city centre.
The buses, which carry up to 160 people, would also connect the city's two hospitals and universities.
Mr Khan said: "An efficient and reliable transport system is critical to any local community.
"Today's announcement seeks to tackle congestion in the city at peak times, whilst presenting sustainable and practical alternatives to the car."
Metro chairman Ryk Downes said: "NGT will mean quicker journeys into and around Leeds, which will in turn result in new jobs and business opportunities for people across West Yorkshire and beyond.
"It will speed the Leeds City Region's recovery from recession, boost its economy and enhance its ability to compete on the national and international stage."
• A new £15.2m entrance to Leeds railway station has also been approved and awarded £13.2m of government funding.
The new entrance at Granary Wharf would allow passengers to access the station from both sides of the River Aire.