INDIANAPOLIS -- A state board on Thursday approved a deal that clears the way for construction to begin on a $500 million stadium for the Indianapolis Colts.

The approval by the Indiana Stadium and Convention Center Building Authority came a day after news that the panel and the team struck a development agreement.

Excavation work could begin as early as next week, and a groundbreaking ceremony could be held the week of Sept. 20, officials said.

"It's exciting. It's a great day to sort of see it come to fruition," said Republican state Rep. Jeff Espich, chairman of the budget-writing House Ways and Means Committee.

The development deal addresses stadium design and long-term financing.

The biggest hurdle in negotiations was a proposed $3 per ticket tax for Colts games -- something the team opposed. The deal doesn't totally remove the possibility that the tax could be imposed, but it contains provisions that make it virtually impossible, RTV6's Norman Cox reported.

The ticket tax would have brought in about $2.5 million, but officials say they should have enough of a cushion to cover expenses.

The stadium will feature 1.6 million to 1.8 million square feet, more than twice the size of Conseco Fieldhouse, where the Indiana Pacers play. It will include 140 to 150 suites and about 300 parking spaces.

The agreement between the Colts and the state was the last significant step before work can start on the 63,000-seat retractable-roof stadium, which is slated to be completed no later than Aug. 15, 2008.

State Sen. Luke Kenley, R-Noblesville, a nonvoting member of the state stadium board, said he believed the stadium would be finished on time even though continued negotiations prevented the planned Aug. 1 groundbreaking.

The team and the city announced an agreement last week on a new stadium lease that will keep the team in Indianapolis for at least the next 30 years. The state is overseeing construction of the new stadium, but it will be operated by the city.

Demolition work already has started near the RCA Dome to make room for the new stadium.