Authority chief executive Malcolm Snow announced the works approval on Wednesday afternoon, including for a temporary construction compound on the car park next to the ACT Magistrates Court, despite significant opposition from some nearby traders.

The approval covers 5.4 kilometres of rail tracks, the removal and replacement of hundreds of trees, new intersections and landscaping.

The ACT will have to make new applications for poles and overhead wires, stop design, mid-block crossings for pedestrians in the Northbourne median, new and relocated traffic signs, paths, bus shelters and construction works such as hoardings.

The National Capital Authority said it had assessed "the proposition of a light rail system" in the corridor and found it consistent with the National Capital Plan and the Griffin legacy. "The proposal reinforces the main avenues by: realising Northbourne Avenue as a multi-use boulevard providing a corridor for public transport; preventing the Central National Area from being overwhelmed by through traffic and; providing a public transport system that reduces car dependency," it said.

The proposal recognised the "distinct landscape characters" of the route, with Northbourne Avenue retaining its character as a tree-lined boulevard and the Federal Highway retaining its bush-like qualities. The Federal Highway currently had a "random mix" of natives and exotics, but in amendments to the tram proposal would now have a significant number of extra native trees.

While the character of Northbourne would change as trees were removed and replaced, the replacement Eucalyptus mannifera trees would be "approaching maturity" and heights of 10-20 metres within 10 to 15 years of planting.

The authority received 16 formal submissions.

To concerns from owners of lodges on the Northbourne Avenue service road north of Dickson, and to a resident of that street who said the closure of access from Swinden Street would leave him without access, the authority said plans had been changed to allow a left turn in and out from the service road.

It acknowledged "a level of inconvenience to businesses during the construction" but said a separate works application would have to be lodged covering "dust, air, traffic, waste and recycling, contamination, heritage and spoilt" during construction.

To concerns about slower traffic and worse congestion, it said while driving times would be slower once the tram was operating, the difference was expected to be less than 10 per cent, which was considered "an acceptable impact on the road network efficiency for the increase in public transport ... and the need for the light rail to have a priority run."

Regarding concerns about the cost, it said: "Decisions on how the ACT government spend ratepayer's money is not a matter for consideration by the NCA."

Mr Snow said the authority had a responsibility "to ensure the highest standards of planning and development are adhered to. We must be satisfied that the urban design and landscape quality of the corridor is appropriate for Canberra's main approach, consistent with its national significance."

Capital Metro Minister Simon Corbell welcomed the solutions to improve access along Swinden Street and Antill Street.

"The changes to the designs will maintain ease of access for residents and customers while minimising the use of the area as a rat-run route," he said.

Changes had also been made to remove a right hand turn from Northbourne Avenue to Rudd Street and add new signalised intersections along Northbourne Avenue.

Major construction for the tram is to begin in October, coinciding with the ACT election, with the first work at the Gungahlin construction compound and on Flemington Road.

Trams will begin operating in early 2019.