This will improve connectivity between Leeds, Manchester and York, and deliver electrification and upgrades between York and Church Fenton.
Proposals for further electrification on the Transpennine Route are also being considered.
It also said it would fund £69m of improvements to increase freight capacity between the Port of Southampton and the Midlands, as well as pump £15m into part funding new stations at White Rose and Thorpe Park in Leeds and Marsh Barton in Exeter.
Today’s announcement coincides with completion of the first phase of £1.5bn Midland main line upgrade, introducing new electric trains.
Transport Secretary Grant Shapps said: “Modernising and upgrading our vital transport links is critical to levelling up every part of this country, unleashing our economy and spreading opportunity as we build back better.”