Victoria state premier Daniel Andrews joined minister for public transport Jacinta Allan have announced that TBMs will be used to excavate the two tunnels between the new CBD South and Domain stations.
Planning and development for the project is under way, with AU$4.5bn (£2.9bn) in funding already secured - almost half the total expected cost.
The decision to use TBMs was made to minimise the environmental impact on the river and limit inconvenience to locals. Other techniques would have caused significant disruption to and its surrounds.
The tunnel will be 11m below the surface and will sit to the east of the Princes Bridge, around 7m below the riverbed.
The details of the final location, design and construction methodology for the tunnels will be determined by the appointed construction contractor.
Melbourne Metro will deliver two new 9km rail tunnels and five new stations to Melbourne’s rail network, unlocking capacity in the City Loop so more trains can run more often.