Planning permission was granted in 2006 for West8's design to transform the tired and run-down park between County Hall and the Royal Festival Hall but until now the project has remained on the drawing board.
Works to a park may not seems the obvious use for the transport budget, but the improvements to Jubilee Gardens fit in with the Mayor of London's 'Great Outdoors' agenda.
Together with the cash already committed through local landowners' section 106 agreements, this means around three quarters of the funding required for the £5.5 million scheme is now in place.
The Jubilee Gardens Steering Group now aims to complete the new park in time for The Queen's Diamond Jubilee and the Olympic Games in 2012.
The steering group is now preparing a variation of the approved West8 scheme to create a lush and green park which will be submitted for planning approval during the summer. Work could start in early 2011.
"The fact that this investment is coming in time for the 2012 Olympic and Paralympic Games and the Queen's Jubilee is fantastic news.
"I'm delighted that our bid has been successful. It will help to turn Jubilee Gardens into a truly top quality public space that will include new trees, flower beds, lighting and a play area, helping to confirm the area's reputation as one of London's most popular public spaces."
The project has been held up by a lack of funds and a complicated set of legal issues relating to the ownership of County Hall.
"On behalf of the Jubilee Gardens Steering Group, I wish to thank the Mayor and Transport for London for the funding which recognises the need for the Jubilee Gardens to be made worthy of its prime location next to the London Eye and become a new green landmark for the capital," says Ted Inman, chief executive of the South Bank Employers' Group.
"It will be intensively used by local residents and employees and by millions of visitors. Together with monies already secured, we now have a significant proportion of the overall budget and are determined to deliver this exciting project in time for the Queen's Diamond Jubilee and London 2012."
The future of Jubilee Gardens is likely to be a hotly debated issue over the coming months.
The Friends of Jubilee Gardens and other local campaign groups would like to see the park extended across the entire space between County Hall and the railway line, including the current Hungerford Car Park.
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