The new line from Snow Hill Station through the city centre to New Street Station received a boost yesterday when Local Transport Minister Norman Baker rubber stamped central government funding for the scheme.
Utility diversions and minor civils works are already being carried-out ahead of the main route construction.
Operator Centro said “spades in the ground” for the main contract would not be seen until early 2013 with a 2015 completion date.
The Enquirer can reveal the shortlist of bidders for the scheme is Balfour Beatty, Morgan Sindall and Thomas Vale.
The Department for Transport will provide £75.4m towards the £128m cost of the scheme.
Centro will now sign contracts for the new fleet of trams, a bigger maintenance depot at Wednesbury and for the construction of the city centre extension.
The £15m depot contract is being chased by Mansell, Volker Fizpatrick, Balfour Beatty and Osborne.
Centro chief executive Geoff Inskip said: “We are delighted to get the final go-ahead from Treasury and Ministers.
“Norman Baker has been a great advocate for this project and we will waste no time in pressing ahead with the construction of the extension which, together with the rebuilding of New Street Station, will transform our public transport network.
“Today’s announcement is marvellous news for passengers and represents a further shot in the arm for the Birmingham and Black Country economy.”