A newly created state panel gave a green light Wednesday to a controversial oil pipeline tunnel beneath the Great Lakes.

The Mackinac Straits Corridor Authority, at its inaugural meeting in St. Ignace, approved an agreement with Canadian energy giant Enbridge Energy LLC to build a tunnel beneath the Straits of Mackinac that will house a replacement segment for Enbridge's Line 5 pipeline and other utilities, state officials announced.

The authority approved a transfer of property rights that will allow Enbridge to construct the tunnel in bedrock.

Gov. Rick Snyder and leaders of the state departments of Natural Resources and Environmental Quality also inked an agreement with Enbridge that requires the company "to undertake an enhanced inspection and stewardship regimen," according to a news release from the state.

The agreement includes financial penalties for Enbridge for missed construction deadlines.

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Line 5 carries oil and natural gas liquids between Superior, Wisconsin, and Sarnia, Ontario. Environmental groups have strongly opposed the tunnel and want Line 5 shut down.

Wednesday's decision comes just ahead of Democrats Gretchen Whitmer and Dana Nessel assuming the offices of governor and attorney general, respectively.

Both oppose the tunnel plan as leaving Michigan at risk for a catastrophic spill during the seven to 10 years it is expected to take to dig the $350-million tunnel.

Once the tunnel is completed, ownership will be turned over to the Mackinac Straits Corridor Authority. The authority will be able to lease space in the tunnel to additional utilities.

In the news release, Snyder said his fundamental goal has been to protect the Great Lakes against an oil spill.

“(Wednesday's) actions will result in the removal of the oil pipeline from the bottom of the Straits of Mackinac, maintain critical infrastructure connections between our peninsulas, provide energy security for residents of the Upper Peninsula and northern Michigan and create good-paying jobs," he said. "Enbridge will pay 100 percent of the costs for design, construction, operation and maintenance of the tunnel, and will shut down the current Line 5 segment in the Straits once the tunnel is complete.”

Snyder signed legislation last week to create the Mackinac Straits Corridor Authority, just one day after he received the bill from the Legislature. The quick timeline was part of an effort to get agreements finalized with Enbridge before the end of the year.

The Associated Press contributed to this report. Staff writers Paul Egan and Kathleen Gray also contributed. Contact staff writer Ann Zaniewski at 313-222-6594 or azaniewski@freepress.com. Follow her on Twitter: @AnnZaniewski.