The $11 billion Melbourne Metro Tunnel is set to open a year earlier than expected, Premier Daniel Andrews has announced.

The new underground rail project designed to untangle bottlenecks in the City Loop will be completed in 2025, the Premier revealed on Wednesday as he released the tunnel contracts.

Passers-by watch as the City Square site is excavated to make way for the underground Town Hall Station. Credit:Justin McManus

Final $6 billion contracts for the tunnel and station works were signed in December last year with the Cross Yarra Partnership – a consortium led by LendLease Engineering, John Holland, Bouygues Construction and Capella Capital.

The contract for the Public Private Partnership outlines that the tunnel will be finished by the end of 2025.