Minn. Stat. § 162.091

When a municipal state-aid street route is so located that in order to achieve the designated objectives the commissioner determines that it is necessary to construct the street across a portion of another municipality or state, the municipality initiating the construction is authorized to spend municipal state-aid street funds for that purpose in the same manner as other expenditures for municipal state-aid street purposes are made. No part of that street may be constructed in another municipality until both municipalities approve the construction.