The councillors voted in favour of the tunnel link, despite a recommendation against it by council officials. This advise was backed by a technical report from consultant Scott Wilson Scotland, which showed a bridge crossing would be a less risky and cheaper option.
"This (tunnelled) option presents significant construction risks," said report author and head of transport at Highland Council Sam McNaughton.
"Much of the work takes place below the level of the river and the canal, and the general ground water table, and significant temporary works will need to be put in place to keep the deep excavations free of ground and flood water during the construction phase."
However, Scottish National and Liberal Democrat councillors teamed up to back the tunnel after an online poll of local people showed there was 90% support for the tunnel. Councillors voted 41 to 21 to approve it.
The tunnel would pass 15m under the canal with 900m of approach roads “substantially below ground level” and protected by 15m-high walls to prevent flooding.
The canal would be closed for nine months while the tunnel is bored, but officials warned that there was a major risk to the proposed 30-month construction timetable between 2012 and 2015.
The council will now apply to the Scottish parliament for funding for the project – part of a southern bypass of the city known as the Inverness Trunk Link Road to cut road congestion in the city.