The secretary of state for transport has approved the extension of London Underground's Northern line from Kennington to Battersea via Nine Elms.
This will involve the construction of two new stations: one at the heart of the Battersea Power Station redevelopment and another at Nine Elms to the east, serving new developments and existing communities.
Extending the line will cut journey times to the West End and the City to just under 15 minutes while supporting 24,000 new jobs and over 18,000 new homes.
Mayor of London Boris Johnson said: "The benefits of major infrastructure projects such as this are enormous - cutting journey times for passengers, supporting London's future growth and creating jobs right across the UK."
The construction project will support 1,000 jobs and create around 50 apprenticeships throughout the supply chain. Work is expected to begin in spring next year, with the full cost expected to be up to £1 billion.