The line is just over 11 miles (17.7km) long
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Nearly £8m is being spent on a Cornish branch line so that trains can run every half hour.
The Falmouth to Truro branch line is the first project to win support from the Convergence Programme, the European fund which has replaced Objective One.
The plan is to dual the track to allow trains to pass each other.
It will mean the Falmouth Branch line - which is just over 11 miles (17.7km) long - will get 29 trains a day, up from the current 12.
About 250,000 passengers a year use the line at the moment and it is hoped that will double.
The Head of Transport at Cornwall County Council, Nigel Blackler said: "With the congestion on some of the routes into Truro now it's really important we start to increase the capacity of the rail system so that we can help meet the major demand for travelling to Truro - which totals about 14,000 commuters into Truro every day."
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Increasing demand
1997 - 156,000 journeys were made on the line
2007 - 261,000 journeys were made on the line
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The improvement is a partnership between Cornwall County Council, Network Rail and First Great Western and more than £4.5m of the cost is coming from Cornwall's new European Convergence fund.
Cornwall County Council is providing £2.5m and Network Rail is contributing £600,000.
Julian Crow from First Great Western said: "Cornwall's branch lines are carrying more passengers than ever and we are really pleased to be working with Cornwall County Council to make the Truro - Falmouth line so much more useful to local customers and the local economy."
Work on the track is due to begin in October.
First Great Western says the new timetable will also mean more jobs for train crews in Cornwall.
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