Suspension cables on the existing Forth road bridge are suffering from advanced corrosion.
Operator the Forth Estuary Transport Authority is to start installation of dehumidification to arrest corrosion later this year.
It had been thought that if dehumidification was successful operation of the bridge could continue without weight restrictions for the foreseeable future.
But Scottish transport minister Tavish Scott today told ministers that a Â£1bn plus replacement crossing is required.
He said three possible locations have already been identified, though further work is required to determine whether a bridge or tunnel is the best option.
Scottish Executive ministers have asked Transport Scotland to work up more detailed plans for the replacement â€œmultimodalâ€ crossing.
Scott said the Executive was seeking a final recommendation of what type of crossing is required, the location of the crossing, and the costs involved by May.
A final recommendation will be considered by ministers this summer.
â€œThe scale of the crossing will be the biggest construction project since devolution,â€ said Scott.
â€œCabinet is clear doing nothing is not an option given the importance of this crossing to the Scottish economy and the people of Fife.â€
The Executiveâ€™s announcement was greeted enthusiastically by Edinburgh City Council.
â€œThis is an opportunity to create a crossing that offers bus and tram links as well as catering to cars and lorries,â€ said Council leader Ewan Aitken.
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