SALEM — The city will receive $420,000 from the state to fund the South River Harborwalk, allowing construction of the $1.5 million downtown boardwalk to finally move forward.

The harborwalk, which will run from Congress Street along the South River to Derby Street, is a piece of the city's long-term Salem Harbor plan, which also envisions a terminal for cruise ships and a continuous walkway from Forest River Park to Winter Island and the Willows.

"Without these funds, this project doesn't happen," Mayor Kim Driscoll said. "Our slogan has been, 'Plan the work; work the plan.'"

The state's Seaport Advisory Council, chaired by Lt. Gov. Tim Murray, officially announced the money at a meeting in Gloucester yesterday afternoon. Salem's portion is part of an $8.2 million Seaport Bond Bill that also benefits other coastal cities across the state.

While Salem still has a long way to go before other major portions of the Salem Harbor Plan start construction, the money at least allows the city to move forward on one key element.

"It's clearly a huge part of the economic development of the city," Murray said after a meeting at Old Town Hall yesterday. "We're trying to do our part as partners to allows the city to grow."

The city also received a $474,000 state grant last year to build a park on Peabody Street, right on the proposed harbor walk.

Construction of the harborwalk is expected to start later this year.

"The waterfront is our economic engine," Driscoll said. "Tourism seems to be the one area of the economy that's not hurting."

Around noon yesterday, Murray visited the Witch City with other heads of state agencies, who addressed a crowd of state representatives, mayors, town managers, and police and fire chiefs at Old Town Hall.

Murray's staffers billed the meeting as a stop on the lieutenant governor's listening tour, an opportunity for state and local officials to find ways to collaborate on important issues, ranging from group insurance to regional emergency dispatch.

Last night, Murray also addressed a meeting of the Salem Partnership, a group focused on the city's economic revitalization.

The Seaport Advisory Council is committing $1.2 million toward the overall construction costs of the $1.5 million harborwalk project. The project cost more than originally expected because of various structural improvements that must be made, including replacing a wall at the South River basin.

Still, city officials want to place a high priority on developing Salem Harbor.

"Some communities have 128 or busy highways," Driscoll said. "We have an active waterfront."