"The United States Postal Service is very pleased to see that this important building, both in terms of its architectural significance and its postal history, will play a key role in New York City's future," says Tom Samra, Postal Service VP, in a statement.

The post office purchase is the first step in the development of Moynihan Station, which is expected to greatly reduce congestion at Penn Station by creating a hub for the Long Island Railroad and New Jersey Transit. The Related Cos. and Vornado are co-developing the project.

"Infrastructure investments like the one we are making with Moynihan Station are critical to the future economic viability of our state," says Gov. Eliot Spitzer. "It will serve as an anchor to the redevelopment of the West Side."

The Port Authority of New York and New Jersey paid $140 million for the acquisition with the remainder coming private developers and a mortgage loan.

"The Port Authority is pleased to make a substantial investment in this critical transportation project," Anthony Shorris, executive director of the Port Authority. "Our region is growing, and we need to start working now to ensure that our infrastructure stands ready to support that growth and reduce congestion. This project, along with the Trans-Hudson Express Tunnel, shows that we are actively tackling these long-term mobility issues."