The plan is to work with local councils to build thousands of new homes.
Government wants to hear from at least 20 local authorities to take the scheme forward. York, Taunton and Swindon councils have already come forward with proposals to spearhead the new initiative and have identified railway sites that could be pooled to deliver housing and other locally-led regeneration.
Communities Secretary Greg Clark said: "We’re determined to fire up communities and back local business so they build much needed housing and create thousands of jobs. Rail stations are a hub of communities, connectivity and commerce and should be making the most of their unique potential to attract investment and opportunities.
"With record numbers of people travelling by train, it makes sense to bring people closer to stations and develop sites that have space for thousands of new homes and offices.
"This new initiative will bring about a step change in development and ensure we go further and faster in putting these rail sites to good use."
Proposals suggest that land at York Central station can support up to 2,500 homes. Housing would be key to creating a sustainable new community and would include Starter Homes and community facilities. Around 100,000 square metres of office and commercial space for private sector firms could also be built.
Plans at Taunton station envisage a significant increase in commercial spaces and homes in an underused site on the edge of the town centre. Remodelling of the station layout and car park, supported by the Local Growth Fund would complement this development.
The area around Swindon station could provide opportunities to boost housing in the town by creating homes and commercial opportunities taking advantage of the benefits brought by the Great Western Electrification Programme. Swindon has plans for the regeneration of its town centre; redevelopment of land around the station would help to maximise and enhance these opportunities, the council believes.