The US Government will provide $280m for urban circulator projects such as streetcars, buses and bus facilities, transport Secretary Ray LaHood said.
Nearly $130m in unallocated discretionary New Starts / Small Starts Program funds will be used to finance streetcars and other urban circulator systems, with a maximum of $25m per project.
The remaining $150m in unallocated discretionary bus and bus facility funds will finance new mobility options in urban and rural communities.
The fund is part of the government's Livability Initiative, which is a joint venture of the Department of Transportation, Department of Housing and Urban Development and Environmental Protection Agency.
"This represents a significant effort to promote livable communities, improve the quality of life for more Americans and create more transportation choices that serve the needs of individual communities," said LaHood.
The Federal Transit Administration plans to announce grants early in 2010.