In this study, a solution for the response of a poroelastic medium around a deeply excavated circular tunnel is analytically formulated based on Biot’s consolidation theory. The proposed solution considers the initial anisotropic stress in the medium around lined or unlined tunnels and is an improvement over previous solutions (Carter and Booker, 1982, 1984) because it considers Biot’s coefficient, the combined compressibility of liquid and solid phases in the porous medium, and a thick-walled liner. The solution is expressed using the Laplace transform domain, and numerical inversion techniques are used to obtain real time domain results. The new solution is verified by comparing it with previous analytical solutions and numerical results obtained using the commercial finite element software COMSOL Multiphysics (COMSOL AB, Stockholm, Sweden). Parametric studies are performed to determine the influences of Biot’s coefficient and the combined compressibility and liner properties during the consolidation process.