By Inti Landauro

PARIS--Australian toll road operator Transurban (TCL.AU) has picked a group formed by French construction firm Bouygues SA (EN.FR) and Lend Lease (LLC.AU) to build a twin motorway tunnel that will require an investment of A$2.65 billion ($1.7 billion).

Transurban said the joint venture between Bouygues and Lend Lease was selected as preferred contractor for the project, in a statement on its website. The contract still needs planning approval, the company said.

The project, dubbed NorthConnex, will be a 9-kilometer tunnel outside Syndey, the country's largest city, linking two of its main highways.

Transurban picked the Bouygues group after a competitive bidding process that attracted several bidders, the company said.

A Bouygues official confirmed the Transurban decision.

Write to Inti Landauro at inti.landauro@wsj.com

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