The government will fund nearly £400m of the project which will cost a total of £598m .
The revamp will include three new exits from the station into Birmingham city centre.
Building work on the first phase should finish by 2011 with the station being kept open while work on the new concourse is carried out.
Following the revamp, the new station will have a 10,500 sq ms concourse.
Passenger capacity at the station will also be doubled while each platform will be accessible via escalators.
Network Rail said discussions were ongoing about the future of the Pallasades shopping centre.
Pedestrian links to the railway station will also be improved as part of the plans.
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