The authority has voted in favor of a new plan that will reduce costs and will both rebuild the Gardiner East section, and repair the western section.
Costs under the previous plan had surged from $2.6bn to $3.6bn, but the council chose not to use a P3 route, instead opting for a rebuild and repair option that would keep costs to $2.3bn.
Mayor John Tory said that the work was essential and could not be delayed any longer, something that also made the publicly funded route more attractive.
A report in November from senior staff at the council had recommended dropping the P3 route for the project.