The Trump administration said Thursday that it will release almost $60 million in withheld funding for the Second Avenue subway extension in New York City.

Previously, the Metropolitan Transportation Authority sued the Trump administration to unlock the money, and warned that the withholding of funds would cause “a domino effect” of delays and inflated costs.

However, shortly before a federal judge was set to hear oral arguments in the lawsuit, the Department of Transportation released a letter to the MTA’s chair and CEO, Janno Lieber, saying that a deal had been reached to release the funds.

The letter detailed how the Trump administration originally found “troubling” information that MTA contractors took race and sex into consideration as part of its bidding-and-contract process. Since then, the transit agency has agreed to make changes.

“In light of MTA’s agreement to take corrective actions, DOT has completed its review and is resuming the processing of reimbursement requests pursuant to normal procedures,” the DOT said in the letter.

The project is a $7 billion expansion of the Second Avenue subway line into East Harlem, and $3.4 billion of the funding is expected to come from the federal government.

“We took the Trump Administration to court after they illegally froze funding for the Second Avenue Subway,” Gov. Kathy Hochul of New York said on X. “Today, they backed down. The freeze is over.”

Last month, Spectrum News reported that President Donald Trump seemed unaware of the legal battle over the funding, as he indicated the project should be completed.

“I haven’t heard about the Second Avenue subway in 20 years,” Trump told the outlet. “I guess they got to get it finished. They spent trillions of dollars, practically. I know they spent more money on that than on anything, I think, in the history of our city in New York City. And it’s been under construction for a long time. It’s very sad, actually.”

The Trump administration also froze $16 billion in funds for the Gateway train tunnel being built between New York and New Jersey, at the start of the government shutdown last year.

New York and New Jersey sued to release the Gateway funds, and in February, a federal judge ordered the administration to release the money, which it did.

The case has been tied up in appeals for months, which have threatened a stop-start crisis that local officials have warned could imperil the project.

“The real challenge here is that with any of these megaprojects, time is always a really big factor in the costs,” Thomas Wright, the president and CEO of the Regional Plan Association, told amNewYork for a piece published Thursday. “And the longer they take, the more expensive they’re going to be. And funding delays and challenges about getting them done don’t help, and can really actually potentially damage these projects. It certainly raises the costs.”