New York ? Mayor Michael Bloomberg’s plan to reduce midtown traffic by collecting tolls from vehicles that travel to the city on weekdays got a major boost Tuesday, when the U.S. Department of Transportation announced it will pay $354 million to launch the plan.

Still, “congestion pricing” is hardly a done deal. The city won’t get the money unless state legislators approve Bloomberg’s plan or an alternative to it within 90 days of reconvening – roughly by the end of March, DOT Secretary Mary Peters said at a news conference.

So far, all state lawmakers have agreed to do is appoint a commission to study the plan. That commission’s recommendations, which are expected by Jan. 31, must then be brought back to the City Council and state legislature for final approval.

“This is a very significant piece of what we need to begin this process,” said Gov. Eliot Spitzer, who answered questions on the DOT announcement alongside Bloomberg at an affordable housing news conference in the Bronx Tuesday. “We feel great that we will get this done.”

Spitzer and others said now that the federal money has come through, they expect to appoint the members of the 17-member commission soon.

The mayor’s plan is to charge motorists $8 – $21 for trucks – to enter Manhattan below 86th Street on weekdays between 6 a.m. and 6 p.m. Motorists within the zone also would have to pay to drive, but the charges would be lower. He says it would be a way to reduce congestion and pollution while creating a steady source of money for mass transit improvements.

New York would be the first U.S. city to implement the plan, which is in place in London and Singapore.

State Assembly Speaker Sheldon Silver, who has raised many questions about the mayor’s plan, stressed that it hasn’t been approved yet.

“My Assembly colleagues in and near New York City have heard concerns from their constituents as well. I believe it is essential that we consider these concerns,” Silver said.

Some lawmakers from Long Island and the four boroughs outside Manhattan have said the plan will squeeze their constituents, many of whom commute into the city; stress public transportation; and cause parking problems outside the toll areas.

“If the City Council and state Legislature come up with a viable alternative to the mayor’s plan, I believe Transportation Secretary Peters has an obligation to approve that plan,” Silver added.

Bloomberg said he is open to new ideas.

“We’re not married to any one plan; we’re married to reducing congestion so the economy isn’t hurt and so our air is better,” Bloomberg said.