Minister Tim Crookall said the motion would ensure the scheme was 'finally' delivered.
Tynwald has voted to approve the return of the horse trams to the Sea Terminal.
Minister Tim Crookall said the motion would ensure the scheme is 'finally' delivered.
He said the continuation of the tramway 'represents a sensible option' and warned doing nothing would risk damaging the Island's attractiveness as a heritage hotspot.
The plan will see £2.5million in funding approved, with a further £500,000 held in reserve by Treasury.
Former minister Dr Michelle Haywood welcomed the move and said she hopes it 'ends the uncertainty' that has dogged the tramway despite repeated Tynwald votes.
Mr Crookall said the funding only includes tram tracks and not shelters, but that the track could allow more modern trams to operate along Douglas promenades.
Gary Clueit MLC was the only person to vote against the plans.
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