Edinburgh City Council has agreed that its tram line will now go to St Andrews Square as originally planned.
The move comes after opposition councillors combined to truncate the planned line short of the city centre.
This provoked an angry reaction from the Scottish Government, who threatened to withdraw the remaining £72m of funding.
But after further questioning senior officers, and considering the merits of completing the tram route to St Andrews Square, SNP and Liberal Democrat members backed a resolution to restore the original route.
City of Edinburgh Council Leader Jenny Dawe said: “Continuing with the tram route to St Andrew Square was the only sensible option for Edinburgh.
“I look forward to seeing a new work programme which enables our tramline to be built and operational as quickly as possible.”
The council also agreed to increase funding to businesses which will be affected by the construction of the on-street section of the tramline over the next two years.