The Erie Canal was completed in 1825. While the idea of a waterway which would connect the Great Lakes with the Atlantic Ocean began as early as 1783, it was the passion of Governor DeWitt Clinton that made the canal a reality.
Edgar Mayhew Bacon in The Hudson From Ocean to Source, says that the city of Albany's population grew rapidly after the invention of the steamboat and the completion of the Erie Canal.
Visit the Official New York State Canals Home Page
The University of Rochester has posted a thorough History of the Erie Canal