The Mayor's office says that the Northern Line extension will reduce pressure on Vauxhall station and existing Northern Line services, in addition to boosting the area's economy.
It is expected that work on the line could begin by 2015, with services in operation by 2020.
A consultation on the plans is already underway.
More top news
A 42 year-old man from Thornton Heath has been jailed for ten years after carrying out a series of attacks on women in the City of London.
A new mansion on The Bishops Avenue in Hampstead has been bought for £33.7m.
London's mayor has launched a campaign to inform Londoners about tips to cope with air pollution.