The NSW Government has granted approval for the Western Harbour Tunnel - the city's third harbour crossing.

Planning approval has been granted for the 6.5 kilometre long tunnel, featuring three lanes in each direction, expected to cost the NSW Government $14 billion.

A 4km stretch of the Warringah Freeway will be upgraded in the first stage of the project.

The Western Harbour Tunnel itself will run through concrete tunnel tubes in a trench on the bottom of Sydney Harbour between Waverton and Rozelle.

Transport Minister Andrew Constance says the Western Harbour Tunnel and Warringah Freeway upgrade will ease the pressure on some of Sydney's busiest roads.

“The Western Harbour Tunnel will take pressure off the Sydney Harbour Bridge, Sydney Harbour Tunnel, Anzac Bridge and Western Distributor corridors to revolutionise transport capacity in and around our city,” he said.

“The new tunnel will start at the new Rozelle interchange and head under the Harbour to the Warringah Freeway and will integrate new and existing public transport connections.

“This city-shaping piece of infrastructure will deliver a vital boost to the NSW economy, with the tunnel and freeway upgrade, along with Beaches Link, expected to support around 15,000 full-time equivalent jobs.”

But some locals are outraged. 

A group formed specifically to oppose the project - Stop the Tunnels group - includes local school P&Cs, environment groups and residents groups.

“We're devastated because this project is high impact and high risk,” group spokesperson Larissa Penn said.

“The route of these tunnels goes through Sydney's largest school zone ... we estimate about 20,000 kids will experience really high-level construction impacts for over 10 years.

“Those construction impacts aren't a passing inconvenience, they're really significant.”

The group has objected to the Western Harbour Tunnel project several times, including in the form of a petition with almost 11,000 signatures presented to the NSW Parliament last year.

“The kids will have a dozen unfiltered smoke stacks around them between Rozelle and Balgowlah by the time these projects are finished,” Ms Penn said.

“This project dredges the harbour at its most contaminated point, that's been well documented in the Environmental Impact Statement (EIS) and objections.

“There's a multitude of really serious concerns and we just don't feel like they've been taken seriously.”

But the Transport Minister says the Government's Chief Scientist went over all of the potential  health and environmental impacts of the ventilation stacks.

“The reason the Government engaged the Chief Scientist to assess ventilation is to give that confidence so that people know the Government is not going to do anything that is unsafe or detrimental to the health of school children or the community,” Mr Constance said.

The NSW Government will start tendering for contracts in coming weeks.