Washington (CNN) The US Department of Transportation announced Tuesday it is canceling $929 million in grant funds for California's high-speed rail system, escalating the Trump administration's efforts to regain all the federal money for the canceled rail project.

If built, the high-speed rail system would have run from San Francisco to Los Angeles. The department added in a statement that it "is actively exploring every legal option to seek the return from California of $2.5 billion in Federal funds (Federal Railroad Administration) previously granted for this now-defunct project."

The statement from the Department of Transportation heightens the Trump administration's quest to recoup federal money spent on the project that was originally granted in 2009. California Democratic Gov. Gavin Newsom announced last week that he was scrapping the project because it was too costly and would take too long.

That decision led President Donald Trump to demand all the money appropriated for the project by the federal government be returned.

Trump tweeted that California owed the federal government about $3.5 billion for the canceled project. "We want that money back now," he wrote. "Whole project is a 'green' disaster!"

Read More