Work on the upgrade is due to start in 2009 and last until 2014.
The work will see the station double in size, and create new ticket halls, lifts and escalators to allow step-free access from street level to platforms.
The announcement comes as Transport for London (TfL) warns of extensive weekend closures for engineering work.
'Accessible station'
Mr Livingstone said: "The £509m redevelopment of Victoria station is a great example of the huge investment being made to improve the Tube and transport across the capital."
London Underground managing director Tim O'Toole said: "Upgrading Victoria Underground station is a key part of improving the Tube network which will cut congestion and improve access for all our passengers using the station.
"Together with the full Victoria line upgrade, this will deliver much needed capacity and provide a safe, reliable and accessible station, fit for the 21st Century."
Mr O'Toole also detailed planned weekend Tube closures.
These will include:
Mr O'Toole added: "This year the pace of work will step up again. We take great care to avoid line closures clashing with major events such as the London Marathon, Notting Hill Carnival and major concerts and sports events.
"But in order for Tube Lines and Metronet (the private Tube maintenance companies) to renew the Tube, on time and on budget, we will need to close sections of lines virtually every weekend."
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