The government described the North Bothnia railway line as northern Sweden's largest infrastructure project in more than a century.

It will run a total of 270 kilometres (168 miles) along the northeastern coast and link the towns of Umea and Lulea, home to operations from several large industrial companies.

Those include steel company SSAB, mining group LKAB and the Hybrit pilot plant working to develop fossil-fuel-free steel.

Once completed, the railway line will serve the industrial zone.

Tuesday's green light was for the second stage of construction on the railway line, linking the towns of Dava and Skelleftea. It has been repeatedly delayed since 2018 due to ballooning costs.

Construction on the first segment began in 2018, according to the Swedish Transport Agency, with the last portion between Skelleftea and Lulea still at the planning stage.

"This is a long awaited project in the region, essential for industry and crucial for work commuters," Infrastructure Minister Andreas Carlson said.

He said the stretch of railway was "an important prerequisite to make the large investments in this part of the country a success".

In December 2023, a cargo train with a full load of iron ore from mining group LKAB derailed on another line in northern Sweden -- the Malmbanan line linking Kiruna to Narvik.

That crash caused major damage to a long stretch of track and paralysed traffic for three months.

The government vowed Tuesday to implement measures ahead of schedule aimed at boosting "capacity and reliability" on the Malmbanan line.

Backed by the government, Swedish industry has invested massively in mineral-rich northern Sweden, including in fossil-free steel production and large wind farms.

But the green transition, which requires more renewable energy and minerals, threatens the rights and livelihood of Sweden's Indigenous Samis, rights group Amnesty said in a recent report.

Infrastructure projects often intrude on their ancestral activities, such as traditional reindeer herding which requires vast open spaces, the rights group said.

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SSAB