The Association of Greater Manchester Authorities formally gave the go ahead to finance the routes, running to Oldham and Rochdale town centres and to Manchester Airport via Wythenshawe, using the transport fund.
According to the construction plan, trams should be running to Oldham and Rochdale town centres by spring 2014 and to Manchester Airport by mid 2016.
The airport line is also being part funded by the Manchester Airports Group.
Lord Peter Smith, chair of the AGMA executive, said: “Public transport has a crucial part to play in supporting Greater Manchester’s economy and these Metrolink extensions will give a huge boost to the region.
“These new Metrolink lines in particular will be the catalyst for regeneration in several areas, so the announcement is great news.”