Newfoundland and Labrador and Nova Scotia have agreed to develop the Lower Churchill hydroelectric megaproject in Labrador. (Nalcor)

The Lower Churchill hydro megaproject in Labrador will steam forward despite the resignation of Danny Williams, says Nova Scotia Premier Darrell Dexter.

Williams, 61, who announced Thursday he will step down next week as Newfoundland and Labrador's ninth premier, said that negotiating a deal to develop hydroelectric power on the Lower Churchill was the last goal he wanted to achieve in his political career.

Williams and Dexter signed a term sheet in St. John's last week that will see an 824-megawatt plant built at Muskrat Falls, with the power running first to Newfoundland and then much of it brought to Nova Scotia by underwater cables. A formal contract will be signed later in 2011.

Dexter said he sees no reason why the $6.2-billion project will not proceed.

"That project is going to move forward quite quickly and we expect to see in fact construction on the maritime-link portion of it take place quite quickly," Dexter said.

The cost of building the maritime link will be borne by Halifax-based Emera Inc., while Nalcor, Newfoundland and Labrador's Crown-owned energy corporation, will pay for the rest.

Dexter said it is significant that Kathy Dunderdale, Newfoundland and Labrador's natural resources minister as well as the province's deputy premier, will replace Williams and serve as premier until a new Progressive Conservative leader is picked next year.

"She is every bit as much committed to that project — that was perfectly clear when she was here last week," Dexter said, referring to a presentation in Halifax.

Williams, meanwhile, said that he is comfortable leaving now, even though a formal contract is not yet signed.

Williams told reporters Thursday that if he had stayed on to see the deal finalized, he would have been obliged to run in the next election and then stay in office for a year or two.

"The Churchill has always been a major goal for me.… Only when that deal was signed did it really come to me that this is probably the time for you to move on," Williams said.

"There's no doubt in my mind that the Muskrat Falls deal will be done."