Conservative Tees Valley Mayor Ben Houchen has committed to the investment into a viability study into the creation of an eastern link tunnel connecting Redcar and Hartlepool.
If deemed feasible, the journey between the two towns would be significantly reduced from a 45-minute drive to “just a few minutes”, he said.
The Tees Valley Combined Authority is funding the project through investment previously earmarked for the now-cancelled northern leg of HS2.
If the study finds the cost of the crossing is too high, or it predicts usage will be too low, it may recommend scrapping the plan.
A land assessment must also be carried out to determine whether a tunnel can be built in the area.
The feasibility study will not only consider the Tees Tunnel but also the possibility of a bridge over the river.
Mr Houchen said: “I personally don’t think a bridge is the right idea as it could limit the size of ships that you get down the river.
“We don’t want that to impact on the businesses that rely on the river and, to be fair, that’s pretty much the heart of our economy in Teesside.”
