The fibre run is part of Aussie Broadband's broader fibre network plans.
"We had originally planned to install a cable through the water, like a submarine cable. But there was already an available duct that runs through the tunnel so we decided to take that route instead," said managing director Phillip Britt.
The new fibre network provides Aussie Broadband with its own connections to NBN POIs (points of interconnect) and commercial data centres. It will also be used to provide business customers with fibre connections running at speeds up to 10Gbps for business customers, or even 100Gbps or greater for specialist applications.
The 720 core optical fibre cable through the Harbour Tunnel is being installed by Global Utility Construction.
Global's managing director Aaron Wright said "We had to operate within a very strict schedule, with a four hour window available on specific nights only."
"It runs from near NBN's Dalley POI or Point of Interconnect through the tunnel and out into North Sydney. The next POI on the north is St Leonards, but that's 2-3km north of the tunnel exit," he added.
"It will pick up three Equinix data centres in Alexandria, and the NBN POIs in Newton, Glebe, City South and Dalley. This is the hardest part because there's about 3.5km of civil construction needed in Alexandria alone."
Britt expects all of these POIs will be connected at the same time.
"Sydney will be a simple run from Alexandria to Macquarie Park, but the diverse path will follow," he said.
"There's around 1,000m to construct in Macquarie Park and it will pick up two data centres; NextDC S1 and NextDC S2."
Aussie Broadband has already started running fibre out to suburban Melbourne NBN POIs in Hawthorn, Kew, Balwyn North, Nunawading and Ringwood, with the St Kilda, Caulfield and Cheltenham NBN POI connections expected to be completed in the next few months.
"We plan to build fully diverse routes to over 75 NBN POIs and 24 key data centres across Australia," said Britt.