Confirmation that a second Tyne Tunnel is to be built has been hailed as good news for North-East motorists and businesses.

The new crossing is expected to cost about £140m and will be built east of the existing tunnel that runs under the river between Jarrow on South Tyneside and Howden, North Tyneside.

It is expected to be completed by 2009 and will be funded by tolls. The current crossing, which opened in 1967, is used by 11 million vehicles annually.

A spokesman for the Department of Transport said: "In accordance with the Transport and Works Act, approval has been given for a second traffic crossing under the River Tyne.

"There will not be any government money involved in this and it is now up to regeneration agencies and others to fund it and get it built."

Mick Henry, chairman of the Association of North-East Councils, said: "This is great news for the region.

"It will be beneficial not just to the Tyneside conurbation but also to the region as a whole, in terms of the opportunities it will present for boosting economic development, support for regeneration and potential new businesses, and the jobs that these could bring.

"The second Tyne crossing will present excellent opportunities not just within the immediate vicinity of the crossing, in North and South Tyneside, but all along the A19 corridor, including South East Northumberland.

"The crossing could have an enormous impact on improving transport and connectivity in the region.

"It will help relieve the growing problem of congestion at what is a vital part of the region's transport infrastructure. This will have really positive benefits for people who have to frequently cross the Tyne at this point, and also the businesses which use and rely upon the region's road network.''

The Tyne and Wear Passenger Transport Authority (PTA) argued for the crossing at a public inquiry and its chairman David Wood said: "This is the news that businesses, regional agencies and drivers have all been waiting for.

"The new Tyne crossing has long been needed to reduce congestion and pollution at the Tyne Tunnel and, to a lesser extent, at the other Tyne crossings.''

George Cowcher, chief executive of the North-East Chamber of Commerce, said: "This is the best possible news.

"NECC has campaigned for years for this development and now that it has finally arrived we are over the moon.

"The original Tyne Tunnel was a revolutionary solution to a transport problem but it has far exceeded its capacity. The ensuing congestion has been a hindrance to the region's economic development ever since.

"Now that a second tunnel will be built we can look forward to a new era of prosperity."