The move forms a part of the $302bn Grow America Act, a four-year national vision that was announced by the Obama Administration to address the aging transportation network.
US Transportation Secretary Anthony Foxx said: "We’ve introduced the Grow America Act to provide more long-term funding so other states may also continue to meet the rising demand for more and better transportation choices."
Also known as the Metro Green Line, the 11-mile light rail line includes 18 new stations that will connect the downtown areas of Minneapolis and St Paul, the University of Minnesota, the Midway District and the State Capitol complex.
The line will also link to the Metro Blue Line, which serves Minneapolis-St Paul International Airport and the Mall of America.
The new light rail line is anticipated to serve more than 40,000 weekday passengers by 2030.
US DoT acting under secretary of transportation for policy Peter Rogoff said: "Projects like the new Green Line will make a huge difference for hardworking families, students and seniors, who deserve reliable transportation options to get to work, school and other opportunities."
The DoT’s federal transit administration provided $474m through its capital investment grant programme, as well as $4.5m in other DoT funds toward the $957m project, while the remainder cost was provided by state and local funding sources.
Image: US DoT unveils new Central Corridor Light Rail Line. Photo: courtesy of US Department of Transportation Federal Transit Administration.