Southwark Council has agreed to pay £50,000 towards the cost of a feasibility study into the proposed extension of the Bakerloo line beyond Elephant & Castle.
"I have committed to investigating the feasibility of a proposed extension of the Bakerloo line through Southwark and Lewisham towards Hayes in Bromley," said the Mayor of London Boris Johnson.
"I have asked Transport for London to ascertain the wider economic benefits of such a scheme, the impact it could have on London's future growth and economic development as well reviewing the viability and funding options.
"No funding is set aside to develop this proposal further at this stage and this work will enable options to be considered."
TfL is expecting both Southwark and Lewisham councils to contribute to the cost of the study and Southwark Council recently agreed to put up £50,000.
The figure represents half of this year's discretionary transport funding received by the council from TfL.
"The extension of the Bakerloo line into south east London would be incredibly welcome, but we should recognise that people have been talking about it for 87 years," said Caroline Pidgeon AM, a Lib Dem member of the London Assembly.
"If progress is ever to be made in extending the Bakerloo line the very first hurdle that needs to be crossed is for a number of south London boroughs to start working together and for a compelling economic case to be produced.
"Until even this happens it is highly misleading for the Mayor of London and others to suggest it is in the bag and is a done deal, where the reality is so different."