The money will support the York Central Partnership project, led by Homes England and Network Rail, to build a new city centre quarter on old railway land.
Subject to planning approval, the £77m will be sued for infrastructure to connect the site, including a bridge over the East Coast mainline railway, solving access problems to the brownfield site.
There are plans for 3,705 homes, 1.2 million square feet of commercial development and an enhancement of the setting and access to the National Railway Museum.
Investment in the York Central project was first announced in the March 2020 budget. The Ministry of Housing, Communities & Local Government has now confirmed the amount of funding and handed responsibility for overseeing the infrastructure investment to Homes England and Network Rail.
A reserved matters planning application for the first phase has already been submitted to City of York Council for a new main road entrance to the development site; a new bridge over the East Coast Main Line; cycling and pedestrian routes; improved existing and new drainage systems; and landscaping as the beginning of the new public park.
Homes England interim chair Simon Dudley said: “This investment is a clear signal of the government’s commitment to levelling up across the country by providing much needed homes and employment space in York. The confirmation of funding provides that market with some much-needed certainty around a major strategic site at a time when it is planning ahead to recover from the pandemic.
“We look forward to working with all the project partners on behalf of the government to unlock this challenging site so it will become a real landmark development for people living and working in the city, as well as visitors.”
Network Rail regional director Rob McIntosh added: “This land has been underused for too long and our railway will be a key part of the success of the development, providing connectivity across the north as well as to the capitals in London and Scotland as we look to support the economic recovery from the Covid-19 pandemic.”