The UK government has earmarked £130m for Network Rail's Northern Hub network to improve the rail network around Manchester.
The investment will boost capacity and increase line speeds on three routes, including the Hope Valley line between Sheffield and Manchester.
Currently the company has two-fifths of the £560m required for the project, with a decision on the rest of the funding due to be made by the government by July.
Network Rail chief executive David Higgins said that further funding for the initial stages of the Northern Hub will benefit passengers as well as drive economic growth.
"To realise the project's total value of £4bn to the Northern economy and create between 20,000 and 30,000 new jobs, the final stages of funding will need to be supported in the rail budgets to be announced later this year," Higgins said.
Last year, the UK government committed £85m to build a rail link between Piccadilly and Victoria stations in Manchester as part of the hub plan.
Northern Hub's plans include laying new tracks, improvement of stations, electrification of major routes, cutting journey times and new rolling stock.
The project is designed to transform trans-Pennine rail with high-speed, non-stop services connecting cities across the North, benefiting Yorkshire, the North West and North East.