Premier Mark McGowan has scrapped the former government's plans for a bus rapid transit service to Ellenbrook, announcing he would widen Lord Street at a cost of $57 million instead.
The new Labor government would also refocus on a rail line commitment, he said, with the long-awaited train line to Ellenbrook and new Ellenbrook station set to be finished by 2022.
Mr McGowan said the first step in Labor's Metronet plan would see construction of a new dual-carriageway road to be called New Lord Street, leading to Perth's north eastern suburbs, starting in coming months.
"A bus lane for Ellenbrook was never going to cut it; that's why we've moved swiftly to build a new dual-carriageway to ease traffic congestion and start work on the rail line to Ellenbrook," he said.
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"Our commitment to the north-eastern suburbs was to deliver road improvements and Metronet - and that's exactly what we're going to do."
The new road corridor has been designed to complement the future train line, and is a result of contract renegotiations facilitated by the State Government.
It would ease congestion, with 14,000 vehicles currently using the existing Lord Street each day. Mr McGowan said 90 jobs would be created by the project.
The existing Lord Street would be retained.
Transport Minister Rita Saffioti said she believed a move away from bus transit and towards a proper train service in Perth's north-eastern suburbs was necessary.
"A bus lane for Ellenbrook is just not a proper solution, so we've successfully renegotiated the contract, at no extra cost, to build the New Lord Street and start working on the rail line to Ellenbrook instead," she said.
"New Lord Street will address one of the major bottlenecks on our road network - the southbound approach to the Marshall Road roundabout, where queues during the morning peak can extend to 2.5 kilometres.
"This project forms part of a series of transport improvements for Perth's north-eastern suburbs."
The New Lord Street project is expected to be completed by mid-2018.
Mr McGowan also announced a series of new bus stops, bus priority measures and park-and-ride facilities for the area in order to improve transport in the meantime.
The Ellenbrook train line is likely to be remembered as Colin Barnett's "biggest broken promise", after the Liberal Party announced their plans to upgrade the area's long-suffering public transport system in 2008.
However, plans were put on the backburner and locals were left furious as the party's attention turned towards Aubin Grove and Perth's southern suburbs.
Mr McGowan was criticised by the Liberal Party for the Metronet program in 2015, when he said the project was estimated to cost $2.5 billion.
Former Liberal Transport Minister Dean Nalder said Mr McGowan was "dreaming" if he thought he could build what he intended for that price tag.