The Federal Highway Administration has given CSX Transportation clearance to rebuild an aging rail tunnel in Southeast Washington.

After a series of delays— and raucous opposition from neighbors — the federal agency signed a Record of Decision on Tuesday supporting the reconstruction and expansion of the Virginia Avenue Tunnel, a critical piece of infrastructure in the Washington region’s rail system.

CSX Transportation can now move into the local permitting phase, followed by what could be about 31 / 2 years of construction. Although it must obtain permits from the city to move forward, there is every indication that the process will go smoothly. Even before completion of the mandated National Environmental Policy Act review, the D.C. Department of Transportation agreed to let CSX take over the roads near the tunnel for the project. Crews could start securing the site as early as this fall, officials said.

“It is a positive step for the country and for the District,” said Louis E. Renjel Jr., CSX’s vice president of strategic infrastructure initiatives. “At the end of the day, it will be good for everybody that we modernize the infrastructure, that we alleviate a bottleneck that impacts VRE and Amtrak every day and that we build a modern tunnel that can allow trains to take up to 280 trucks off the road.”

Daily, 20 to 30 cargo trains travel the 3,800-foot-long tunnel, beneath Virginia Avenue SE, from 2nd to Eleventh streets. The federal review found that rebuilding the 110-year-structure is necessary to maintain the integrity of what is considered an important access point in the East Coast rail system. Along with improving with the tunnel’s deteriorating condition, CSX has proposed expanding the tunnel to increase capacity. After completion, the $170 million project will allow for double-stacked freight cars.

The plan approved by the government would convert the single-track tunnel into two tracks, addressing a choke point created when trains passing through the tunnel merge from two tracks to one and slow the movement of freight up and down the East Coast.

Although commuter trains don’t use the tunnel, when there is a problem that halts freight traffic, it affects commuter-rail access to and from Union Station. Virginia Railway Express trains cross the Long Bridge from Virginia and use the CSX freight trains’ tracks before heading to Union Station.

The FHA said it approved CSX’s plan after considering public comments from multiple hearings, where many residents testified against the project. The agency said the construction plan it approved will minimize neighborhood impact from the project. In addition, with its decision, the agency approved the short-term closure of Interstate 695 ramps at Sixth and Eighth Streets SE and using a portion of the 11th Street Bridge on I-695.

The lengthy construction period concerns some residents, especially those who live in a new community of rowhouses just steps away from the tunnel. They worry that their quality of life will suffer with active construction in their front yards and say they fear living next to a site that will include an open trench.

Residents also are concerned about dust, noise and vibration from the project. Citing concerns about derailments, some residents have asked the city to remove the tracks from the middle of the booming residential neighborhood, just a mile from the U.S. Capitol.

The D.C. Council has committed funding to a comprehensive study of the city’s rail network, but it is unclear whether that process could potentially delay the project. The Committee of 100 on the Federal City, which serves as a watchdog on transportation issues, has threatened to sue to block the project.

Some lawmakers, including council member Mary M. Cheh (D-Ward 3) and David Catania, an at-large member who was running as an independent in Tuesday’s mayoral race, have expressed support for residents. At a hearing, Cheh mentioned the possibility of council intervention to halt the project until the study is done.

“This project should not be granted any permits until the appropriate answers are provided,” said Helen Douglas, a resident with the group DCSafeRail, which opposes the project.

Some residents were expected to gather outside the U.S. Department of Transportation on Tuesday evening to protest the decision.

Renjel said that although there will be some inconveniences for residents, the company committed to leaving the area “better than we found it.” CSX’s mitigation plan includes improving area parks and streets after construction. It also plans to offer monetary compensation to those residents in closest proximity to the construction and up to $75,000 to make up for property devaluation for residents who choose to sell.