Design work on the £1.75bn Midlands Rail Hub project is set to start after the government provided an extra £123m.
The scheme will involve more than 50 stations with the first phase seeing an additional train every hour in both directions between central Birmingham and locations including Bristol, Cardiff, Cheltenham and Worcester.
This first wave of funding, which is reallocated HS2 money, will enable design work to begin on creating space for extra services.
Transport Secretary, Mark Harper, said: “The Midlands Rail Hub will bring huge benefits to passengers in the region and beyond, so it’s great to be in Birmingham with Mayor Andy Street to kick start this important project.
“Today’s announcement is part of the government’s plan to invest in transport projects with reallocated HS2 funding, helping to grow the economy and better connect communities across the Midlands.”
More London to Birmingham services will be extended from Moor Street to Snow Hill station meaning the Chiltern line will also serve Birmingham’s Snow Hill business district.
In addition, Kings Norton station will be made more accessible, while platforms at Snow Hill, Moor Street, and Kings Norton stations will be upgraded.
The number of trains between Birmingham and Leicester will be doubled from 2 to 4 per hour, while additional trains are planned between Birmingham and Nottingham, and the new Birmingham to Worcester trains extended to Hereford.
Andy Street, Mayor of West Midlands and chair of the West Midlands Rail Executive (WMRE), added: “The Midlands Rail Hub will deliver a revolution in public transport for our region opening up more capacity on the routes in and out of central Birmingham which will allow us to run more services to more places both locally and nationally.
“Midlands Rail Hub will also provide an opportunity for us to open more new stations and lines across our network as well as deliver faster journey times into central Birmingham from the new Camp Hill line stations that are currently under construction at Moseley Village, Kings Heath and Pineapple Road.
“This investment will not only better connect communities to convenient and rapid public transport services but also attract further investment into our region, delivering jobs, growth and greater prosperity.
“It’s important not to forget that this new funding comes on top of the billions of pounds worth of transport investment we have already secured for the West Midlands.
“That funding is really significant and will help turbo-charge our plans to improve public transport across the region, connecting local people to education, training, health and leisure services as well as job opportunities.”
The Midlands Rail Hub announcement comes as the British Business Bank launched its £400m Midlands Engine Investment Fund II today.
Subject to future decisions, this first phase of the Rail Hub could be completed by the early 2030s.