The line runs from Liverpool Lime Street to Manchester Victoria via Huyton and Newton-le-Willows.
The electrification, along with some track and signal improvements, will allow passengers to reach Manchester from Liverpool in 30 minutes.
Passengers will also benefit from improvements to reliability and comfort as electric trains are not only quicker, but quieter, smoother and more reliable than diesel trains.
Other benefits of the plan include electric trains in service between Manchester Airport and Glasgow and Edinburgh and a diversionary route for electric trains on the West Coast Main Line to and from Liverpool and Manchester, says the DfT.
The electrification also means the Manchester-Leeds rail line can run higher-capacity trains as the route will get the existing diesel trains.
The construction is expected to start within two years and will take four years to complete. Planning and design work will begin shortly.