The line will connect Ningbo, a port city south of Shanghai, to Zhoushan, an archipelago off the east coast.
The proposed underwater tunnel will be a part of the 77-kilometer Yong-Zhou Railway plan (Yong is the nickname of Ningbo) to boost tourism and create a two-hour-commute zone within Zhejiang Province.
First mentioned in a government transportation plan in 2005, the feasibility study of the Yong-Zhou Railway plan was approved by Beijing in November.
Within the 77 km (47.8 miles) railway route, some 70.92 km of tracks will be newly built, including a 16.2 km undersea section.
When completed, the Yong-Zhou Railway will connect Ningbo East Station and Zhoushan (Baiquan) Station by high-speed trains that hit a maximum speed of 250 kilometers per hour.
The new route, connecting to the existing vast high-speed rail network in China, will transport travelers from Hangzhou -- capital city of Zhejiang -- to Zhoushan in 80 minutes.
The current journey takes about 4.5 hours by bus or a 2.5-hour drive by personal vehicle.
Seven stations are planned for the entire route, including four new stations and three redeveloped ones.
In addition to the undersea tunnel, a road-rail bridge will be built to link parts of the archipelago.