Construction work on a $16 billion rail tunnel under the Hudson River will restart next week after the Trump administration released the remaining federal funding that it had previously frozen, New York Governor Kathy Hochul said in a social media post.

The Gateway Development Commission, which is building the new tunnel between New Jersey and Manhattan, had received about half of the money by Tuesday, but needed the remaining reimbursement to restart work. Now that has happened, construction will kick off again next week, Hochul said on February 18, in a post on X.

Gateway halted work on the new tunnel between New Jersey and Manhattan earlier in February. A federal judge last week directed the Trump administration to send the funds to Gateway. The federal government expects Gateway to receive the full $205 million of reimbursement payments by February 19 at the latest, according to a letter dated February 17 that the U.S. Department of Justice filed to the court on the same day. 

“Gateway Development Commission has received an additional disbursement of $77 million from the federal government, and we expect to receive the full $205 million in reimbursement funds owed to the project for costs GDC incurred since federal funding for the Hudson Tunnel Project was paused on October 1, 2025,” the GDC said in a statement on February 17. “Construction remains paused for now, and we continue to work with our contractors to plan how to deploy these funds in the most effective way and get workers back on the job to resume some construction as soon as possible.”

Last week, Gateway said it had received $30 million of the frozen funds.

Getting work going again on Gateway will benefit thousands of New Jersey Transit and Amtrak commuters. The existing tunnel is more than a century old and needs rehabilitation. Gateway construction is expected to finish in 2035, which will allow renovations to begin on the existing tunnel.

“The Gateway Tunnel project is an economic lifeline for New York, New Jersey, and the nation,” Senate Minority Leader Chuck Schumer, a New York Democrat, said in a statement Tuesday. “Another $77 million in previously cut-off federal funds is now in the bank, and more must follow to get 1,000 workers back on the job. These funds were approved by Congress and committed by contract between the feds and the states, and they never should have been frozen in the first place.”

Gateway was forced to stop construction earlier this month after its funding and credit lines dried up. It’s been negotiating with the U.S. Department of Transportation since October 2025 to show that it’s in compliance with a new rule that prohibits contracting requirements based on race or gender.

New York Governor Kathy Hochul is concerned the project is at risk of future work stoppages unless the federal government releases all of the funding, she said February 17 during a press conference at a Gateway construction site in Manhattan. About 1,000 construction workers were let go when work paused.

Hochul said she spoke with President Donald Trump on February 16, after he posted a message on social media disparaging the Gateway project. She urged the president to free up the federal funds to help bring back about 1,000 construction workers who were let go during the suspension. New Jersey and New York earlier this month sued the federal government to release the funds after Gateway filed a similar suit.

Hochul acknowledged that the resumption of funds will get people back to work, but said that she’s going to stay focused on this as the project needs to get done.

“It should not come to us having to spend taxpayer dollars on litigation literally every day of the week to stop things that they know they shouldn’t be doing,” Hochul said during the press conference. “It is illegal for them to withhold the money.”