New York City is ready to build a first-in-the-nation congestion pricing program, designed to collect billions of dollars to fund mass transit while discouraging drivers from jamming up Midtown Manhattan.

It is an ambitious undertaking that will serve as either a model or cautionary tale for cities across the country with similar climate change and traffic reduction goals.

Gov. Kathy Hochul on Tuesday celebrated the plan’s final approval by the federal government, which paved the way for a local panel to begin deciding on toll rates, discounts, exemptions and other allowances.

The group was appointed by the Metropolitan Transportation Authority, which runs the region’s subway and bus network, and it will hold its first meeting July 19. The authority says the program could begin as soon as spring 2024.

“We are setting the standard right here in real time for how we can achieve cleaner air, safer streets and better transit,” Ms. Hochul said during a news conference. “Other cities are paying attention. How is it going to work here? Well, we’re going to show them.”

While many key details have not yet been decided, this is how the program might work, according to people involved in bringing congestion pricing to New York and the M.T.A.’s reports on the program.

What will tolls cost?

The M.T.A. still hasn’t decided on how much the congestion pricing tolls will cost, but in a report last year it said it was reviewing proposals that would charge drivers who enter Manhattan south of 60th Street up to $23 for a rush-hour trip and $17 during off-peak hours.

The proposals put fee caps on certain vehicles — noncommercial passenger vehicles, taxis and for-hire cars like Ubers entering the district, for instance, would not be tolled more than once per day. Other allowances may be considered for vehicles that have already paid tolls that same day on bridges and tunnels.

How will the M.T.A. track cars that enter the tolling zone?

Electronic detection points will be placed at entrances and exits to the tolling zone. On avenues, the equipment will generally be placed between 60th and 61st Streets.

The authority estimates that it will install 120 detection points in all; 85 would be placed on traffic poles and arms, while 35 would be placed on structures like bridges and overhead signs.

How will drivers pay congestion pricing tolls?

Tolls will primarily be collected through the E-ZPass system, which many drivers already use to pay tolls on bridges and highways.

Drivers who do not have E-ZPass transponders mounted to their cars will be identified with cameras that take photos of their license plates, and they will get bills in the mail. Fees are higher for drivers who do not have an E-ZPass.

“Congestion pricing will be as seamless as driving over a toll bridge or driving through a toll tunnel is today,” said Danny Pearlstein, a spokesman for Riders Alliance, a public transit advocacy group. “Rather than the old tollbooths and coin baskets of the past, you will drive underneath a detector and you will be billed either via E-ZPass or by mail.”

Can drivers pay with cash?

Drivers won’t be able to pay with cash directly, but the authority sells prepaid cards, known as Reload Cards, that drivers can add funds to with cash. They work like credit or debit cards and can be used to fund E-ZPass accounts so that drivers without bank accounts can reap discounts. They can be purchased online, over the phone or in person through a retailer.

Will there be late fees?

The M.T.A. charges late fees that range from $5 to $100 for existing tolls, so it is very likely it will charge late fees for congestion pricing tolls, too.

Other cities with congestion pricing programs charge drivers fees if they don’t pay tolls instantly. In London, for instance, the tolls typically cost 15 pounds, or about $19, but drivers can face up to £270 in penalties if they miss payment deadlines, and officials can tack on extra enforcement fees.

Will drivers face penalties if they don’t pay?

Probably. The M.T.A. already has a law enforcement arm that makes sure drivers pay tolls.

The authority has the power to suspend vehicle registrations for people who don’t pay, and officials can ban them from using the region’s bridge and tunnel toll facilities. M.T.A. officers routinely stop and seize vehicles from repeat offenders.

Will people with disabilities and other people who rely on vehicles be exempt?

Yes. By law, certain vehicles carrying people with disabilities and authorized emergency vehicles won’t pay congestion pricing tolls.

People whose primary residence is inside the district and whose income is less than $60,000 will also be eligible for a state tax credit equal to the amount of their tolls, according to the M.T.A.

Could this worsen a parking shortage at the edge of the congestion pricing zone?

What if people seeking to avoid tolls decide to drive as close as possible to the tolling zone, park their cars and finish their trip via public transit?

“There is already a big shortage of parking in Manhattan north of 60th Street, so drivers will quickly learn this is not an option if they don’t already know it,” said Kathryn Wylde, a member of the panel that will decide toll rates and the chief executive of the Partnership for New York City, a business group. She added that the city could issue parking permits for uptown residents if street parking became too scarce, but that “no analysis suggests that this is more than a theoretical concern.”