The planned 16-mile route – which will extend Metro Transit's Green Line from downtown Minneapolis to Eden Prairie – previously had a price tag of $1.65 billion.
But that's jumped to $1.994 billion following additional engineering and environmental studies that found poor ground conditions and soil contamination along the route, the Met Council said.
It's unclear if this cost increase will "imperil the project," the Pioneer Press says.
Gov. Mark Dayton had the same question, saying in a statement he was "shocked and appalled" at the news while suggesting some other options be looked at.
"The continuing escalation of the costs to design and build this line raise serious questions about its viability and affordability," he said. "The full Board of the Metropolitan Council should quickly review other options for providing much-needed public transit to this region of the metro area."
All five cities along the proposed light rail line have approved the preliminary design. Heavy construction was scheduled to take place from 2016-18, with service beginning in 2019, the project's website says.
But now its opening will be delayed until 2020, Met Council says.
Dayton said the cost, timeliness and and service quality of the other possibilities need to be vetted, then compared with the cost of not providing any public transit for that part of the metro.