The UK Department for Transport (DfT) has allocated a £10m ($12.1m) grant for the re-opening of two railway stations on the Walsall to Wolverhampton line.
The fund will be used to construct railway stations at Darlaston and Willenhall, which were closed in 1965.
Further costs will be met by the region’s HS2 Connectivity Fund.
The new stations will be equipped with long-stay car parks, 300 spaces at Darlaston and 150 spaces at Willenhall.
The project is also expected to unlock land for housing, as well as industrial and commercial development along the rail corridor.
West Midlands Mayor Andy Street said: “I am delighted that our ambition to reopen the Walsall to Wolverhampton railway line to passengers has moved a significant step closer with this latest funding from the government.
“Not only will the money help us to build high-class stations at both Darlaston and Willenhall, but these new stations will help drive significant regeneration of the Walsall to Wolverhampton corridor.
“By getting people out of their cars and onto this re-opened passenger line we are tackling both congestion and the climate change emergency at the same time. This announcement really is brilliant news.”
With the proposed designs receiving a positive response from the public, planning applications will be submitted later this year with the intention of reopening by the end of 2021.
The re-opening project will be led by West Midlands Rail Executive (WMRE) and Transport for West Midlands (TfWM), which are part of the West Midlands Combined Authority (WMCA).
They will be working in association with the DfT, Network Rail, West Midlands Railway, Walsall Council and the City of Wolverhampton Council.