The project made it through an 8-7 vote at the Dunedin City Council today after councillors decided to accept a budget overspend.
Councillors considered cuts to the project, and an alternative route was also pitched, but the full project survived after a lengthy discussion.
Cr Christine Garey led the argument for the Albany Street Connection, saying it would improve safety.
Pressing on was important for the council's relationship with the University of Otago, she said.
Funding was at risk of being lost if the council pursued an alternative route, she said.
The other elected members who voted for continuation of the full project were: Dunedin Mayor Sophie Barker and councillors John Chambers, Doug Hall, Marie Laufiso, Mandy Mayhem, Mickey Treadwell and Steve Walker.
Crs Jules Radich and Russell Lund argued the project should be paused while the council looked into what they described as a better alternative, which would be along the banks of the Water of Leith.
Cr Lund said pursuing the alternative plan could save at least $1 million.
Cr Radich doubted the NZ Transport Agency/Waka Kotahi funding was in jeopardy.
The councillors who voted against moving ahead with Albany St were deputy mayor Cherry Lucas and councillors Benedict Ong, Andrew Simms, Lee Vandervis and Brent Weatherall.
Tenders for the project closed on Wednesday.
Two were received and they came in above the council's $3 million budget.
It was not disclosed publicly by how much the tenders exceeded the budget.
The council said it had headroom within its broader transport capital budget to offset the increased cost.
NZTA had agreed to chip in about $1.53 million and council staff said an increased amount appeared likely.
