The connector line will tie together the Gold Line, Blue Line and the Expo Line with a new tunnel and three new stations.
The 1.9-mile underground connection will give Metro riders the ability to take light-rail trips between Azusa and Long Beach, and from the San Gabriel Valley and East Los Angeles to Santa Monica, without transferring.
The connector line will cost approximately $1.4 billion; the balance will come from U.S. Department of Transportation loans, state money and local sales tax receipts.
"In order to stimulate our economy, in order to get people back to work, you have to invest, and one of the best investments is in our transportation and our infrastructure," said Rep. Lucille Roybal-Allard (D-Commerce).
The route will traverse downtown Los Angeles along Second and Flower streets, joining the Little Tokyo/Arts District station with the 7th Street/Metro Center station.
Construction on the project is expected to begin later this year, and if all goes well, the project would open in 2020.
The Associated Press and City News Service contributed to this report.