WASHINGTON, Jan 27 (Reuters) - Pete Buttigieg, a former mayor who challenged Joe Biden for the 2020 Democratic presidential nomination, won U.S. Senate Commerce Committee approval on Wednesday, 21-3, to head the U.S. Transportation Department.

The full Senate will cast a final vote as early as this week on Buttigieg, the former mayor of South Bend, Indiana, who will oversee aviation, highways, vehicles, pipelines and transit as Biden's secretary of transportation.

Biden, who entered the White House a week ago, has proposed $20 billion in additional government assistance to help U.S. transit systems struggling with a massive falloff in ridership amid the COVID-19 pandemic.

Congress has allocated $39 billion in emergency funding for transit systems, including $14 billion approved last month, and $65 billion in government loans and bailouts to U.S. passenger airlines. Lawmakers awarded $12 billion to airports and $2 billion to the Amtrak passenger train service.

Last week, New York City Council Speaker Corey Johnson wrote Buttigieg asking him to immediately authorize the implementation of New York's congestion pricing plan requiring drivers to pay a surcharge in certain heavily trafficked Manhattan neighborhoods.

The plan to impose tolls on drivers entering Manhattan below 60th Street is expected to raise up to $1 billion in annual revenue.

Buttigieg must decide whether to fund a planned $13 billion tunnel connecting New York and New Jersey in the heavily traveled Northeast rail corridor. Senator Bob Menendez, a New Jersey Democrat, said the Trump administration delayed a key Environmental Impact Statement for years.

Biden wants to dramatically boost spending on U.S. infrastructure and vows to boost fuel economy standards that were slashed under Trump and to replace the government's vehicle fleet with electric vehicles.

Past President Donald Trump never had a Senate-confirmed head of the National Highway Traffic Safety Administration (NHTSA), which has numerous ongoing auto safety investigations. (Reporting by David Shepardson, Editing by Franklin Paul and Howard Goller)