Transport chiefs have opted to run the trams along High Street Deritend, serving key locations such as the coach station and Custard Factory.
The decision by transport co-ordinator Centro and Birmingham City Council follows a public consultation last autumn in which 74 per cent of people voted for the High Street option rather than an alternative route along Fazeley Street (see gallery above).
The first section of the Eastside Metro route was agreed last year and will run between the extension currently being built at Bull Street in the city centre, via Albert Street and onto the forthcoming HS2 high speed rail station at Curzon Street.
But after transport chiefs secured extra Government money last summer to take the extension further into Digbeth, the public were offered the chance to have their say on which of two possible routes the trams should take.
The chosen open is almost a mile long and runs from the HS2 station along New Canal Street and Meriden Street before turning left on to High Street Deritend.
It will then travel along the centre of the carriageway, with a stop close to the junction of Milk Street to serve Digbeth Coach Station and the Custard Factory, before turning left into Adderley Street where a terminus is proposed.
The tram extension is a key part of the wider Birmingham Curzon HS2 Masterplan which has been drawn up by the city council and Centro to lay down a blueprint for the redevelopment of 350 acres of land around the HS2 station.
The scheme includes shops, 3.7 million sq ft of offices, a hotel and 2,000 homes.
The route would also link to the Metro expansion plans announced by Birmingham City Council last week as part of its Birmingham Smithfield project to redevelop the site of the old Wholesale Markets.
It will also dovetail with Metro expansion plans outlined in the East Birmingham Prospectus for Growth.