CAPE CHARLES, Va. (WVEC) -- Governor Terry McAuliffe announced on Tuesday that financing is complete to build an additional two-lane tunnel, west of the existing Chesapeake Bay Bridge-Tunnel.

The Chesapeake Bay Bridge and Tunnel Commission will finance the $756 million project through federal and state bonds.

“This new tunnel will expand capacity and improve safety for travelers who use the CBBT, as well as protect the economic competitiveness and quality of life of the Hampton Roads region,” said Governor McAuliffe.

The Parallel Thimble Shoal Tunnel Disgn-Build project was awarded in July.

The Chesapeake Bay Bridge and Tunnel Commission has financed the project through the following:

  • $338.5 million federal bond - Transportation Infrastructure Finance and Innovation Act (TIFIA) Program provides credit assistance for qualified projects of regional and national significance, such as the Parallel Thimble Shoal Tunnel Project.
  • $50 million state bond - The Virginia Transportation Infrastructure Bank offers low-interest loans and grants to localities, transportation authorities and private-sector partners for transportation projects and provides an alternative source of financing for transportation needs in the commonwealth.
  • $321.5 million Revenue Bond Issue
  • Remaining funds for the project come from the Chesapeake Bay Bridge and Tunnel District’s General Fund.

When construction begins, the Virginia Originals gift shop and Chesapeake Grill restaurant will close permanently. The island's Sea Gull Fishing Pier will also be closed during tunnel construction, where it will undergo renovations. The pier will reopen to the public in 2022, upon the project's completion.