A new channel 13.4 km (8.3 mi) long was constructed, providing a shorter, more direct alignment between Port Robinson and Port Colborn and by-passing downtown Welland. The project helped improve navigation along the canal and alleviated problems the presence of a busy Ship Canalvwas causing in Welland.
The by-pass project was a massive undertaking: 16.2 km² (4,000 acres) of land was expropriated for the construction. Approximately 50 million Cubic meters of material was excavated. The new channel is 100 m wide (330 ft), as compared to the 58 m (192 ft) width of the old channel. The channel's minimum depth is 9 m (30 ft). Two tunnels, the Main Street Tunnel and the Town Line Tunnel, were constructed to allow vehicles and trains to pass beneath the canal.
To complement this, an aqueduct, to convey the Welland river under the new canal alignment, was built. The aqueduct's design is what is known as a four-tube inverted-syphon culvert, 200 m (638 ft) long, 28 m (92 ft) wide, and extending 9 m (30 ft) below the navigation channel. It was constructed from 30,000 cubic metres of concrete.
Approximately 1.6 km (0.99 mi) of new river channel was constructed to route the river into the aqueduct. In compensation for the loss of canal banks through the city of Welland, parts of which were being used as a docking area by local industries, the project incorporated a dock, separated from the main travel route.
Many of the area's rail lines, which had previously been constructed to fit around the existing alignment, had to be dramatically altered for the new alignment. An estimated 161 km (100 mi) of new track was laid at a cost of CAD$50 million. A Google Mao is available which shows the changes to the rail network as a result of the canal relocation, as well as changes made since. This map also details the old and new routes of the canal.
The construction started with the sinking of the first shovel on June 9, 1967, and continued for six years. (During construction, a giant "Earth mover" working on the canal, accidentally struck and ruptured a buried natural gas line, which erupted into a torch-like flame approx 90–100 meters high; there were no injuries.) In a symbolic event watched by many residents, on a snowy night, Bridge #13 on Welland's East Main Street came up for the last time, lighted by floodlights, on December 15, 1972, the new bypass would be open to shipping for the next season. (The bridge was actually quietly opened the next day to allow the passage of a St. Lawrence Seaway service vessel.)
The Main Street Tunnel was officially opened on May 20, 1972, with the Townline Tunnel following on July 13. Rail traffic through the Townline Tunnel was inaugurated on January 31, 1973. The new canal was first traversed by the Canadian Coast Guard cutter Griffin on March 27, 1973. The first commercial ship to pass through the by-pass was the M.V. Senneville on March 28, 1973. The official opening ceremony for the Welland By-pass took place on July 14, 1973.
Overall, the project cost approximately CAD$188 million. The new channel reduced the length of the canal by 1.3 km (0.81 mi) and replaced six bridge crossings with the two new tunnels. It reduced the transit time through the Welland Canal by about 30 minutes (5%) as compared to the old alignment.