SAN FRANCISCO -- San Francisco Mayor Gavin Newsom joined several other city officials Tuesday to celebrate the beginning of construction on the Central Subway in the city's South of Market District.

Newsom, San Francisco Municipal Transportation Agency Executive Director Nathaniel Ford, and four city supervisors were among those on hand for a groundbreaking ceremony on the project, which will provide subway service underneath the SoMa, Union Square and Chinatown neighborhoods.

The project is scheduled for completion in 2018. The relocating of utilities has begun along Fourth Street, while tunneling is scheduled to begin in 2012.

Newsom said the subway will reduce surface street congestion, will unite cultural centers around the city, and upwards of 40,000 jobs will be created by its construction.

"This is a big day for all of us," he said.

Ford said that the SFMTA estimates that 76,000 riders will use the subway daily by 2030.

He said both residents and business groups "recognize the ability and capability of modern light rail to improve the quality of life and commercial vitality of our city."

Supervisors David Chiu, Ross Mirkarimi, Bevan Dufty and Carmen Chu attended the ceremony to celebrate what Chiu said is congestion relief for neighborhoods that are some of the densest on the West Coast.

Those neighborhoods are also among the most reliant on public transit in the region. Newsom said between 50 to 60 percent of residents in neighborhoods along the corridor do not have access to automobiles.

The subway will also reduce commute times for many residents.

A trip on the Central Subway is projected to take eight to 10 minutes between Chinatown and the Caltrain station at Fourth and Brannan streets, compared to about 20 minutes on a bus that is often overcrowded and on a congested roadway, according to Muni officials.

The Central Subway project is estimated to cost about $1.6 billion dollars, with the federal government projected to provide $948 million of the funding and the rest made up of state and local dollars.

Newsom said the subway could be "one of the iconic transit projects of the United States of America, but the challenge for us is to make sure ... it's on time and on budget."