The bombshell news was revealed in a report to next week’s board meeting of the West Midlands Combined Authority, which revealed a £36 million shortfall in the scheme’s finances.
Anne Shaw, executive director of Transport for West Midlands, said rising inflation and the continued impact of the coronavirus had placed the scheme under increased financial pressure.
Plans for new railway stations at Darlaston and Willenhall are also facing financial pressures after the authority revealed it needed to find an extra £121 million to finance its commitments.
The first stage of the tram extension, from Wednesbury to Dudley town centre, was due to open this year.
But the West Midlands Combined Authority today revealed that it would not now open until autumn next year.
A further extension, running from Dudley to the Merry Hill shopping centre, may now not open until 2027, said Anne Shaw, executive director for transport at the combined authority. And the final section, which would convert with Brierley Hill town centre, may not go ahead at all.
The second stage was planned to run from Dudley to Brierley Hill, via the Waterfront office park and Merry Hill shopping centre.