Construction of the Lower Thames Crossing, which was due to start in 2024, has been pushed back by two years.
The 14-mile route is designed to ease pressure on the Dartford Crossing but this delay means it won't be operational until 2031 at the earliest.
The estimated final cost of the project - if completed - is set to be around £8 billion.
The government has said that the delay is down to "inflationary pressures".
In a statement, the Department for Transport said: "As one of the largest planning applications ever, the Lower Thames Crossing, backed by £800 million to date, will also be slowed down by 2 years.
"This will allow more time to take into account stakeholder views and prepare an effective and deliverable plan, while helping to meet inflationary pressures and deliver the planning processes properly."
People living near the proposed Lower Thames Crossing say they hope that the latest developments mean it will never be built.
Campaigners are optimistic that the two-year delay - combined with a general election during that time - may mean the project is shelved for good.
Laura Blake from the Thames Crossing Action Group
However, they accept there is a need for more capacity to ease traffic flow.
Laura Blake, chair of the Thames Crossing Action Group, said: "One of the alternatives that we'd like to be given proper consideration is rail improvements between Ashford and Reading.
"The port of Dover doesn't actually have a rail connection. We need to see about getting more freight off the roads and onto more sustainable rail."
In a statement, she added: "This is the beginning of the end for this troubled scheme.
"Rather than delay, the government should put the scheme out of its misery and cancel it for good, rather than continuing to blight people’s lives."
The idea of a Lower Thames Crossing was first discussed in the early 2000s. £800 million has already been spent and contractors appointed.