The Mersey Tidal Power project has been allocated a share of a £1.6M fund by Liverpool City Region.
The funding is for the first stage business case for the multi-million River Mersey renewable energy project, with a provision to look at more detailed options and technical solutions.
The case will be developed over this year, metro mayor Steve Rotheram announced in November, with former Dong Energy UK chairman Brent Cheshire leading the project.
A similar project involving a barrage across the river between New Ferry and Dingle was scrapped in 2011 after studies found £3.5bn construction costs would result in energy costs that were not competitive in the markets at the time.
The £1.6M funding that was approved at a Liverpool City Region Combined Authority meeting on Friday will also support digital connectivity, the city’s bus system and the commissioning of a new Mersey ferry.
Speaking about the plans Metro Mayor Steve Rotheram said: “These proposals set out our key priorities for the next 12 months and how, as a combined authority we will spend our resources in support of our vision for an ambitious, fair, green and connected City Region that works better together.”