The rapid busway on Cedar Avenue overcame a key hurdle Wednesday when a regional transit board approved a plan to cover for more than $3 million in lost funding for the bus service scheduled to begin in 2012.

The move came just one day after the Dakota County Board picked out the sleek new buses for the south-metro corridor, which will be the metro area's first foray into bus rapid transit (BRT).

The start date for the busway -- already under construction in Apple Valley and Lakeville -- had been in jeopardy since the Legislature cut $51.8 million from the state transit budget.

The Metropolitan Council still needs to give its final blessing to the funding plan and the bus order in December, but that approval is expected because council staff members have been involved in crafting both.

"We succeed by taking little steps, and this was a major accomplishment today," Dakota County Commissioner Will Branning said. "Everything is in order to start the buses running in 2012."

The corridor, hailed as a cheaper alternative to light rail, will feature distinctive buses, designed to look like trains, running along dedicated shoulder lanes between Apple Valley and Bloomington, with stops at six stations. Future phases of the project call for an extension of the station-to-station service down Cedar Avenue through Lakeville.

Buses will run every 15 minutes on weekdays and every 30 minutes on weekends.

The $112 million project was already under construction when the Legislature made the cuts to transit funding, complicating plans to pay for the first three years of bus service. Operations in the corridor are expected to cost about $7 million over that time, with about $3.8 million of that coming from the quarter-cent sales tax approved by five counties to pay for transit.

But the Met Council said it would no longer be able pitch in its share of the first three years' operating expenses -- the roughly $3.2 million -- as required before the Cedar Avenue buses could be ordered.

That sent officials from Dakota County, the Met Council and the Minnesota Valley Transit Authority, which will operate the buses, scrambling.

The plan approved Wednesday by the Met Council's Transportation Advisory Board is based on one drafted in September and transfers $3.2 million from a federal grant that was earmarked for transit improvements on Interstate 35W.

Many of those 35W projects, including the park-and-ride at Kenrick Avenue in Lakeville and shoulder improvements south of the Minnesota River, have been completed with other money, including a federal windfall aimed at reducing congestion through innovative projects in metro areas across the country.

Remaining I-35W projects, such as the purchase of additional buses, will be covered by other pots of funding, said Beverley Miller, executive director of MVTA.

"We're recognizing that other federal money that came into play," she said.

Still, the transfer of money from one transit corridor to another raised some eyebrows.

A few representatives to the Transportation Advisory Board wondered whether the 35W funds should have been put back into a regional pool when planners realized they had a surplus. But they ultimately gave unanimous approval to the plan, with one member noting the potential for embarrassment if the rapid busway is built but there is no money for bus service.

Katie Humphrey • 952-746-3286