But the cost of the scheme has risen to ВЈ6.2bn - an increase of ВЈ1bn on previous estimates.
The scheme will see the Connect Plus consortium of Atkins, Balfour Beatty, Egis Projects and Skanska maintain the motorway, and widen it to a fourth lane on some sections, over the next 30 years.
M25 Q&A and VIDEOM25 PFI forum discussion on ConstructionSpaceCommenting today, Balfour Beatty Chief Executive, Ian Tyler, said:
"We are delighted that Connect Plus has reached financial close on the M25 DBFO contract. This landmark contract is critical in supporting London and, more widely, the UK's transport network.
"We look forward to transforming the M25 into a world-class motorway with the highest levels of safety and reliability."
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A total of 17 banks have funded the deal, and the increase in costs is thought to have been because the lenders wanted higher margins before they would commit to offering up the cash.
Work on the project will involve widening the M25 between junctions 16 and 23, as well as between 27 and 30. Improvements will also be made to the Hatfield Tunnel. The work is set to be completed before the start of the Olympic Games in 2012.
Meanwhile hard shoulder running will come into operation between junctions 5 and 7, as well as between 23 and 27.
Who funded the deal:
Connect Plus - ВЈ1.31bn (ВЈ200m equity with the remainder as debt) European Investment Bank - ВЈ185m 16 commercial banks - ВЈ925m