Boston University's controversial plan to build a research laboratory handling some of the world's most dangerous pathogens in the city's South End won final federal approval on Thursday.

The decision by the National Institutes of Health secures $128 million in federal funding for the lab, part of a national group of similar facilities that will study infectious diseases such as Ebola and the West Nile virus.

Construction on the 190,000-square foot National Emerging Infectious Diseases Laboratories is scheduled to begin this month and should be finished by 2008, BU officials said.

"We are proud to be part of the national network of dedicated scientists and researchers who will use this state-of-the-art facility to safely find treatments and cures for some of the most dangerous infectious diseases that threaten Boston, the nation and the world," said Dr. Mark Klempner, lead investigator for the new lab.

The university estimates the new lab will create more than 650 permanent jobs and contribute nearly $3 billion to the local economy over the next twenty years.

University officials say the lab will be safe and will provide needed research into contagious illnesses and possible bioterror agents.

But opponents have criticized the decision to build the lab in a densely populated urban neighborhood — referred to as "swiftly becoming one of the most popular places to live" on the city's Web site — and charge that the NIH did not do enough to assess the impact of a possible accident.

Carrie Russell, staff attorney at the Conservation Law Foundation, an environmental advocacy group, said that although an impact report was done, there wasn't an analysis of the release of an agent that could be transmitted from person to person, such as the plague.

"That's very relevant when talking about siting a lab in one of the densest areas of the city," she said.

The NIH summary on the decision filed Thursday says that of the 21 scenarios considered, all supported the conclusion that the lab would pose "negligible risk to the community."

In its "worst case scenario" the NIH considered the release of anthrax spores, which are not transmitted from person to person, but by contact with the spores themselves.

Opposition to the project escalated in 2004, when three workers at another BU lab became sick after they were exposed to a highly infectious strain of tularemia, or rabbit fever, that they had thought was less harmful.

Although all three of the infected researchers recovered, opponents expressed concern about the university's ability to manage the proposed Biosafety Level 4 lab which, according to the NIH Web site, would "work with dangerous and exotic agents that pose a high individual risk of aerosol-transmitted laboratory infections and life-threatening disease."

University officials said the 2004 accident was not relevant to concerns about the new lab because it will have more comprehensive safety and security precautions.

"The building will be self contained," a university statement said, and "one of the most safely designed structures of its kind in the world."