VDOT has assured that buying out tolls on the extension of Portsmouth’s Martin Luther King Freeway with money that was set aside to improve Route 460 will not affect the ability to fund 460 improvements, should they go ahead.

On Friday, Gov. Terry McAuliffe announced an agreement ensuring no tolls will be collected on the MLK project. It involves transferring $78 million that was set aside for 460 improvements.

The agreement, he announced, will also have Elizabeth River Crossings pay $500,000 annually for a decade to offset tolls being collected to expand the Midtown and Downtown tunnels.

In a news release, state Transportation Secretary Aubrey Layne said he has directed his deputy, Grindly Johnson, to “work with the local community to ensure these monies are invested in the most beneficial way to ease the financial burden of tolls on those residents who need the help the most.”

McAuliffe said the plan would ease the financial pressure of tolling, particularly for Portsmouth residents.

The Elizabeth River Tunnels project, he said, is necessary to reduce congestion, improve safety and benefit the economy, but the prior administration brokered a bad deal.

“We have worked with our private sector partner to ensure there will be no tolls on the MLK extension,” according to McAuliffe. “Imposing a toll to finance the improvements would have placed an unfair burden on the citizens of Portsmouth.”

If the latest 460 plan — to improve 17 miles for between $375 million and $425 million — clears all the hurdles and is approved for funding by the Commonwealth Transportation Board, the $78 million transfer shouldn’t impact the ability to fund the project, VDOT spokeswoman Tamara Rollison said.

The no-tolls plan, which includes a new road from Suffolk to west of Windsor, then improvements to the existing road to just west of Zuni, including a new bridge across the flood-prone Blackwater River, needs a record of decision from the Federal Highway Administration and an environmental permit from the U.S. Army Corps of Engineers.

Then it has to make it through a new prioritization process for projects funded by the Commonwealth Transportation Board.

“If the Commonwealth Transportation Board makes the decision to move forward with 460, then the funds would be allocated toward the decision that they make,” Rollison said.

She said VDOT is continuing to work in collaboration with the federal highway agency and Corps of Engineers toward obtaining permits for the road.

“I know field activities are going on along the proposed corridor this summer,” she said. “We expect to reach a conclusion by next summer.”