The new Transbay Transit Center is expected to serve more than 45 million passengers annually and contain nine transportation systems that will serve commuters and visitors to the Bay Area. The regional facility is expected to be completed in 2014, with a total cost expected to reach $4.2 billion.
U.S. Sen. Dianne Feinstein said the Transportation Department's decision to approve the loan will create thousands of jobs at a time when the state's unemployment rate stands at 12.4 percent.
"This downtown rail station will bring us one step closer to a high-speed rail system for California, which has been a long-term priority for me," Feinstein, D-Calif., said in a news release.
"In addition to creating jobs, high-speed rail will spur commerce while reducing greenhouse gases and reliance on foreign oil."
Federal officials are expected to soon announce which states will get some of the $8 billion set aside last year for high speed rail. Officials view the loan for the transit center as a good sign for California's prospects.
House Speaker Nancy Pelosi said the new transit center will become the "Grand Central of the West." She said the development of nearby housing and businesses should also make the transit center the heart of a revitalized neighborhood.
The loan will finance ramps to the Bay Bridge, a bus storage facility and the design of an underground transit facility. The second phase of the project, still subject to financing commitments, will extend California's commuter rail line to the new transit center.