The funds include the $800 million FEMA promised New Orleans for subsurface infrastructure improvements in the wake of Hurricane Katrina in 2005. The extra $1.2 billion coming from FEMA's Public Assistance Program and is the result of years of negotiations about how much of the damages were directly caused by the storm and how much the federal government would pay for each project.

New Orleans Mayor Mitch Landrieu said the money is the "last piece" in funding to commence a massive construction effort that could last a decade. Combined with an additional influx of $1 billion from the city, it's a third of the estimated $9.3 billion backlog of work planned for New Orleans that Landrieu said will be "the largest infrastructure improvement effort in our city's history."

The funds will also allow the city to do more sewer and water repairs and upgrades in the next few years than it had in the past decade, said Sewerage & Water Board executive director Cedric Grant.

Grant said the upcoming projects would not just repair the damage from Katrina but "harden our infrastructure so that it is stronger and more resilient."

In October 2015, Landrieu created the Fix My Streets Financing Working Group. Comprised of engineering, construction, business and finance professionals, the group is tasked with figuring out how to best fix the city's roadways and to find more avenues of financing.

The city recently started work at the beginning of the year on 40 street projects totaling $200 million. The Sewerage & Water Board is also preparing to break ground on $379 million in improvements to the water system. Included in those projects are two elevated water towers help maintain water pressure during power outages by surging water into the system.