The first of four tunnel-boring machines was launched by the Toronto Transit Commission on Friday morning marking the start of construction on the York-Toronto transit extension, the first subway line to cross municipal borders.

The project is an 8.6-kilometre extension of the TTC's Yonge-University-Spadina line from Downsview Station to the Vaughan Metropolitan Centre at Highway 7.

"It will become a vital link for commuters, residents and businesses," Toronto Mayor Rob Ford said at a news conference at the site of the future Sheppard West station.

"It will give hundreds of thousands of daily commuters new transportation options, reduce gridlock on our roads and make Toronto and our neighbour, York Region, better places to work, play and live."

Ford joined federal and provincial representatives to announce the start of drilling for one of the four Toronto-built tunnel boring machines named Holey, Moley, Yorkie and Torkie.

The $2.6 billion project, jointly funded by the government of Canada, the Province of Ontario, the city of Toronto and York Region, is expected to open by late 2015.

TTC chair Karen Stintz said the extension is on-time and on-budget.

The new line will have four stations in Toronto and one at York University.

"Currently there are 2,000 buses that go to York [University] everyday," Stintz said. "Once this project is open it will help alleviate some of that congestion and meet our regional goals of reduced congestion and reduced emissions."

The other stations include Sheppard West, beside the Barrie Go Transit Line, Finch West Station at Keele Street and Finch Avenue, Steeles West, at North West Gate and Steeles Avenue, Highway 407, adjacent to the highway and Jane Street, and Vaughan Corporate Centre, near Highway 7 west and Jane Street.

Environment Minister Peter Kent said the project has already created jobs and will continue to boost the economy in the GTA.

"It's a solution that simply makes sense," Kent said at the press conference. "We believe investment in transit boosts jobs and boosts the economies of the GTA and Canada."

The giant machines are built by Lovat, a company owned by Caterpillar that employs 380 workers in the GTA.

More than 20,000 jobs are expected to be created by the project.