The Port Authority of New York and New Jersey approved a financing agreement for Larry Silverstein’s 3 World Trade Center that allows him to use $159 million of insurance proceeds to help build the tower.

The agreement, which alters a 2010 deal on the project, follows about a year of negotiations and provides Silverstein with far less than the $1.2 billion of loan guarantees he sought under a previous plan that had been opposed by some board members. Silverstein plans to seek private financing to complete construction on the tower, which is stalled at eight floors.

The Port Authority, which owns the Trade Center site, unanimously approved the alterations to the agreement at a meeting Wednesday. The new deal meets the criteria of not creating additional debt for the agency, said Commissioner Kenneth Lipper, who led opposition to the loan guarantee, viewing it as too risky and a threat to the authority’s credit rating.

“Financing the World Trade Center is part of our mission,” Scott Rechler, the Port Authority’s vice chairman, said at the meeting. “We as an agency cannot rest until this mission is accomplished.”

Silverstein is turning to private investors as he seeks to keep 3 World Trade Center’s anchor tenant, the advertising firm GroupM, which has a June 30 opt-out clause in the lease it signed in December. Rechler said that the company has reiterated its commitment to the 80-story tower.

Silverstein ‘Confident’

“Today’s action, which frees up a portion of our insurance proceeds to be used for the construction of 3 WTC, permits us to immediately jump-start vertical construction,” Silverstein said in a statement. “We remain confident that we will nail down a construction financing package that will allow us to complete the project and create an ideal environment for GroupM employees and other dynamic, creative companies.”

The 2010 agreement will be adjusted to allow Silverstein to use about $159 million of insurance proceeds left over from the $4.6 billion payout from the Sept. 11, 2001 terrorist attack. Silverstein had signed a 99-year lease for the original Twin Towers six weeks before they were destroyed.

Market conditions are more favorable now for Silverstein to raise funds for the project without a government backstop, Port Authority Executive Director Patrick Foye said at a news conference after the meeting.

“They’ve already done outreach to the market,” Foye said. “They’ve been advised by their financial advisers, Goldman Sachs and JPMorgan, that this is a doable deal. Based on favorable changes to the muni markets, we believe that to be the case, and in the weeks and months ahead, they will be going ahead.”