The enhancement work will increase the number of train paths available for both local and cross-border services. Network Rail said.
Scheduled for completion by winter 2013, the work involves re-modelling the junction with the addition of a new rail line and crossover, a section of track which allows trains to move from one line to another.
The overhead stanchions that carry the electric power lines will also be reconfigured and signalling upgraded.
A Network Rail spokesman said: “This programme of work will modernise a key junction on Scotland’s railway, bring significant benefits for those using both local and cross-border routes, as well as boosting the overall reliability of rail services.
“With rail travel expected to continue to grow in popularity in the future, the project will also create the additional capacity needed to deliver more services in the years ahead.”