The project known as the "Ike Dike" has been under discussion since Hurricane Ike devastated the region in 2008. It's designed to keep storm surge out of Galveston Bay by extending the protection afforded by the seawall.
Plans also call for flood control gates at Bolivar Channel and San Luis Pass.
Texas A&M at Galveston professor Bill Merrell says a $250,000 contribution from the City of Galveston's Industrial Development Corporation will be used for economic studies so they can justify the cost of the project to lawmakers and the public.
"We have at least two million at risk and we're adding to that every day here in the Houston region with our growth. Of course the Houston Ship Channel itself generates $178 billion in economic activity."
The cost of building the Ike Dike has been pegged between $4 and 6 billion dollars. Merrill says if lawmakers want to move ahead with the project, he estimates the federal government could pick up about 85 percent of the cost. Local governments would have to pay the rest.
"There would be at least four counties involved so it's a very large source. And you would have to work out different ways to both pay for the dike, and the other part of it that's very important, you have to maintain it after you build it."
Merrill says federal dollars have typically been directed toward hurricane recovery and response, but after recent storms, lawmakers may be more inclined to allocate money for flood control.