Federal Transit Administration officials announced Thursday they had signed the grant agreement which will help create the initial phase of the proposed Woodward Avenue Light Rail project in Detroit. The funding from the federal stimulus bill was granted last August, when federal officials committed to paying for an environmental impact study of the project, a key hurdle that must be crossed.

A private group of backers including Roger Penske, Mike and Marian Ilitch, Dan Gilbert, Peter Karmanos and others, had arranged for about $125 million in private funding for the rail line, which could eventually extend all the way from Hart Plaza to Eight Mile near the state fairgrounds, a total of 9.3 miles.

“Building this light rail system will create jobs for this great American city, and it will stimulate long-term economic growth by attracting investment to downtown Detroit and the New Center area,” said U.S. Transportation Secretary Ray LaHood.