The track from Kemble to Swindon is part of the Stroud Valley line
Funding has been secured to turn the railway line between Swindon and Kemble from single-track to a two-way service.
A meeting of the Transport and Infrastructure Board gave its approval for the £30m ahead of final approval from the Department of Transport.
The work will remove the bottleneck on the Cheltenham to London route.
A Gloucestershire County Council spokesman said the council and local community had worked hard to get the improvements through.
Councillor Stan Waddington added: "We know just how big an improvement this will bring to rail travellers and to businesses right across Gloucestershire."
The Conservative MP for the Cotswolds, Geoffrey Clifton-Brown, has been campaigning for the line to be upgraded for more than 10 years.
"It's good news for the businesses, an all-round a win-win situation. I hope we can turn the funding into action and get the work carried out over the next few years," he said.
The £30m has become available because the Westbury bypass in Wiltshire is no longer going ahead.
But the council needed the support of the South West Strategic Leaders' Board to guarantee the funding - which it got on Thursday.
The track from Kemble to Swindon is part of the Stroud Valley line, which links Gloucestershire and surrounding counties with London and the South East.
It branches from the Birmingham to Bristol main line south of Gloucester, and joins the Great Western Railway route from south Wales to London at Swindon.