The high-speed rail project between Lyon and Turin had run into vociferous opposition from Italian anti-establishment party Five Star Movement.
But the Piedmont region of Italy, where the train line would end, is now under the control of a right wing coalition of parties, after M5S suffered serious election losses.
The rail link has become controversial in Italy. Photo: AFP
The M5S had been campaigning actively to stop construction of the project, holding protests in Piedmont against a project it deems bad for the environment and a waste of public money.
The €8.6-billion tunnel through the Alps, which has already been partially dug, would reduce travel time between Milan and Paris from almost seven hours to just over four.
Supporters of the line, launched nearly 20 years ago and officially scheduled to be finished in 2025, argue that it would rid the roads of a million trucks and avert some three million tonnes of greenhouse gas emissions each year.
The right-wing coalition which has seized Piedmont had voted in favour of the project.
Weakened by a poor performance at the European elections, M5S head Luigi Di Maio appeared to soften his stance on the rail link on Monday, saying the dossier was now in the hands of the prime minister.
Preliminary tenders to pursue work on the Franco-Italian project have been launched, but Rome and Paris had six months from March to take another look at the project before making a definitive commitment.
France supports the rail link, as does the European Union, which has already provided hundreds of millions of euros in funding to the project.