San Francisco’s latest vision for South of Market preserves Interstate 280, gets rid of the Caltrain rail yard, and has the commuter rail line’s downtown extension bypass Mission Bay, instead dipping underground a mile before its current station at Fourth and King streets.

A study to be released Monday, after 3½ years of work, significantly revises an idea raised by then-Mayor Ed Lee in 2013 to improve transit connectivity and create a new neighborhood.

That plan called for rerouting Caltrain, and future high-speed rail trains, through Mission Bay to serve the growing neighborhood. City planners also suggested abandoning the rail yard at Fourth and King streets and taking a battering ram to I-280 north of 16th Street to make way for new development.

But the new study concludes that the I-280 ramps won’t interfere with Caltrain tunnels after all and that rerouting its rails to head through Mission Bay would cost too much and take too long, and wouldn’t attract as many riders as an alignment passing through Fourth and King, its current terminus.

The new plan, estimated to cost $6 billion and take until 2027 to complete, would still alter the current Caltrain alignment, putting the tracks into a new tunnel beneath Pennsylvania Avenue, starting at 25th Street.

That would avert problematic street-level rail crossings at 16th Street and Pennsylvania Avenue and at Seventh Street and Mission Bay Drive, two main entrances to Mission Bay, that would have created traffic troubles or required putting the streets in trenches.

Retaining I-280 and its two ramps to Sixth Street and King Street should make it easier to sell the project to residents and commuters who feared that the plan to demolish the freeway and replace it with an Octavia Boulevard-like street would lead to gridlock.

The city’s ultimate choice on how to coordinate the downtown rail extension, future high-speed rail and electrification of Caltrain is a “100-year decision,” according to the report.

“The stakes here are high,” said Mayor Mark Farrell. “If we do this right, we can improve the region’s connectedness, boost our economy, and physically reconnect Mission Bay and Potrero Hill with the rest of the city. These kinds of decisions come once in a century, and we have a lot more work to do to build consensus. But I’m excited to move this conversation forward, and to think big about the future of San Francisco and the Bay Area.”

Dropping the I-280 demolition should also focus attention on the Caltrain yard and the route to the Transbay Terminal, issues planners consider critical to San Francisco’s future, said Adam Van de Water, senior project engineer for the Office of Economic and Workforce Development.

“This is really about: ‘How do we get trains to the Transbay Transit Center?’” he said. “But we kept hearing from the neighborhood: ‘Are you going to take the freeway down?’”

The 1,000-page full technical analysis will be released Monday.

Gabriel Metcalf, executive director of the urban think tank SPUR, called the rail extension “the most important transit project in the Bay Area.” He said the Pennsylvania Avenue option is less costly than the Third Street alignment and solves the problem of the grade crossings.

“I’m really happy to see that we have a decision now about the alignment so that we can get going on trying to find the money to build it,” he said. “There are pros and cons to all the options, but this looks solid to me. It looks like a good decision.”

State Sen. Scott Wiener, D-San Francisco, said the latest study “seems to foreclose a few options we should still have on the table.”

“The big picture is that the (downtown rail extension) should not be viewed as a stand-alone project,” he said. “It must exist within the context of high-speed rail and the need for a second Transbay Tube. This is about building a comprehensive regional rail system, not just one extension.”

Wiener said that he thinks bypassing Mission Bay is probably a mistake and that removing I-280 is still an idea worth exploring. “Every time we have taken down a freeway, it has been intensely controversial, a huge political fight,” he said. “Then the freeway comes down, and everyone says, ‘Why didn’t we do that a long time ago?’”

On the other hand, he supports the development of the Caltrain rail yards, which he says offers a “huge opportunity for housing.”

Michael Cabanatuan and J.K. Dineen are San Francisco Chronicle staff writers. Email: mcabanatuan@sfchronicle.com, jdineen@sfchronicle.com Twitter: @ctuan, @sfjkdineen