N.J. Stat. § 27:7-18
In the improvement, betterment, repair and maintenance of highways, forming a part of the state highway system, the commissioner shall possess and exercise, in addition to those conferred by this title, all the rights and powers, not incompatible with his functions nor prohibited by law, exercised by overseers of roads and boards of chosen freeholders in road construction, repair and maintenance, except that when a state highway shall run through a city having a population of seventy-five thousand or more, over streets or roads formerly under the jurisdiction of the city, the city shall retain in those streets or roads all its former jurisdiction and rights as to the construction and regulation of the use of all water, sewer, gas and other subsoil conduits and structures.
N.J.S. § 27:7-18