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The Trump administration on Friday released $30 million of $205 million in frozen federal funding for the $16 billion Hudson Tunnel Project in New York after New York and New Jersey sued to challenge the decision.

The two states had sought an emergency hearing after raising concerns the U.S. Department of Transportation was not committing to release the funds.

A U.S. appeals court on Thursday declined to undo a lower court order requiring the funding, which had been frozen in October and forced the project to halt construction last week.

The Gateway Development Commission said it received the initial $30 million "and expect to receive the full $205 million in reimbursement funds. Construction remains paused for now, and we are working with our contractors to plan how to deploy these funds in the most effective way and get workers back on the job to resume some construction as soon as possible."

Judge Jeannette Vargas last week ordered the federal government to release funds for the project to overhaul critical rail infrastructure in New York and New Jersey, which had been frozen by Republican President Donald Trump since October 1.

At a hearing, Justice Department said they were working to release the remainder of the $205 million in the coming days. Vargas ordered the government to file a report on Tuesday on the status of the funding.

U.S. Senator Cory Booker of New Jersey called the announcement good news but said he would fight "until the Trump administration guarantees no more interruptions to building this vital infrastructure."

The halt to construction triggered last week by the funding freeze put 1,000 workers out of work.

Trump offered last month to unfreeze the funds, a source said, in return for support from Democrats to rename Washington Dulles Airport and New York's Penn Station after him. Democrats strongly criticized the suggestion.

The Hudson Tunnel Project aims to build a new commuter rail tunnel connecting Manhattan and New Jersey and repair a century-old tunnel used by more than 200,000 travelers and 425 trains daily. Vargas handed down her ruling hours after New York and New Jersey said construction would halt for lack of funding.

The existing Hudson Tunnel, heavily damaged by Hurricane Sandy in 2012, needs frequent emergency repairs that disrupt travel on the nation's most heavily used passenger rail line.

The project was allocated about $15 billion in federal support under then-President Joe Biden, a Democrat. Nearly $2 billion has been spent so far.

-David Shepardson/Reuters