The Transforming Cities Fund is part of the planned Industrial Strategy to be unveiled next week.
The rationale is to address weaknesses in city transport systems to raise productivity and spread prosperity. New local transport links will be built to make it easier to travel between suburbs and city centres, the government said.
The West Midlands is to get £250m for better transport links, including a £200m expansion of the Midland Metro from Wednesbury to Brierley Hill
While increasing numbers of people are exploiting digital technology to work effectively from home and remote offices, many still struggle with a daily commute to urban offices and factories.
Transport secretary Chris Grayling said: “Investment in transport is crucial to a strong and resilient economy. The Transforming Cities Fund will drive productivity and growth in cities where this is most needed, connecting communities and making it quicker and easier for people to get around.
“We have already seen the impact of better integrated transport links for both passengers and the local economy in cities like Nottingham and Manchester. This new fund will enable more English cities to reap these benefits, helping to deliver the opportunities and ambition of the Industrial Strategy across the country, as well as driving forward the Northern Powerhouse and Midlands Engine.”
As previously reported, the seven-mile Midland Metro line from Wednesbury to the new DY5 Enterprise Zone at Brierley Hill will see the Metro run through Great Bridge, Horseley Heath, Dudley Port, Dudley town centre, the Waterfront and Merry Hill, before terminating at Brierley Hill town centre.