All three levels of government are teaming up to spend some $65 million to protect the Port Lands area from severe flooding.

The investment was announced on Wednesday by Mayor John Tory, Amarjeet Sohi, the federal Minister of Infrastructure and Communities, and Bob Chiarelli, Ontario's Infrastructure Minister. Some 40 other projects, including some in the GTA, also received funding.

Under the agreement, here's how the government funding breaks down:

Government of Canada pays $32,500,000

Government of Ontario pays $16,250,000

City of Toronto pays $16,250,000

Tory said investing heavily in the Port Lands — the mainly industrial area south of Lake Shore Boulevard, from Cherry to Leslie Streets — is crucial in developing a major new part of the city.

"This is just the beginning of unlocking the full potential of our Port Lands," Tory told reporters.

One day, he said, the area will be "one of the most dynamic new neighbourhoods and precincts in all of North America, let along the city of Toronto."

The first step will be to remediate contaminated soil and ensure the area, which sits at the mouth of the Don River, can handle storm runoff now and in the future. Tory said the flood prevention work will also revitalize the Don and improve water quality in the inner harbour.

All of this will be necessary before the Port Lands, and the Unilever site just north of the Port Lands, can be developed.

Work is set to begin in mid-2017, and continue for nearly a year and a half.

Tory said while Wednesday's funding announcement is a "great day" for the city, the area will require many millions more in future years.