Metro trains and stations will be upgraded
The Tyne and Wear Metro and plans for a fourth bridge across the River Wear in Sunderland have received a £400m pledge from the government.
Transport Minister Rosie Winterton revealed the package during a visit to the North East on Thursday.
Metro operator Nexus will get £300m to upgrade stations and infrastructure of the 28-year-old network.
A Sunderland City Council plan for a new crossing for the River Wear will get almost £98m.
Nexus said the deal to fund a nine-year modernisation programme for the Metro was vital to sustain the network's future.
Bernard Garner, director general of Nexus, said: "The deal we have won from government will take modernisation to a whole new level, refurbishing stations and trains and making sure we have the technology in place to deliver one of the best railway networks in the UK.
"Now we have secured the future of Metro we want to use it to provide the springboard from which further ambitious, high quality transport plans can be developed and taken forward - improving connections with bus and extending park-and-ride to reflect modern lifestyles."
The cash will be used from 2010 to pay for the modernisation of stations and overhead power lines, a new communications system, an overhaul of bridges and tunnels and the complete refurbishment of the 90 carriages that make up the train fleet.
Sunderland's plans will see a new four lane bridge between Claxheugh and Castletown to accommodate road traffic, pedestrians and cyclists.
The plan also includes the provision of bus lanes on Wearmouth Bridge and the upgrading of the signalised Southern Bridgehead Roundabout.