Vehicles that can travel on tram or train lines are to be trialled in the UK for the first time.
The tram-trains will replace standard trains on the Penistone Line between Huddersfield, Barnsley and Sheffield for a two-year trial from 2010.
The project is a partnership between train operator Northern Rail, Network Rail and the Department for Transport.
Transport Secretary Ruth Kelly said the tram-trains promised a "new era" in public transport.
"Tram-trains will bring quicker journeys and offer a greener travel option for passengers in Yorkshire," she said.
"Passenger feedback is a vital ingredient in determining the success of the trial and I look forward to hearing what the people of Yorkshire think about the comfort and reliability of tram-trains."
The trial will seek to establish whether vehicles similar to those operating across Europe are suitable for this country's rail network.
Northern Rail will run a competition for manufacturers to build the tram-trains, while Network Rail will spend £15m in track improvements and alterations to stations.
Heidi Mottram, managing director of Northern Rail, said: "We are very excited to be involved in testing this new form of public transport, which will mean higher levels of comfort and a faster journey for our customers on the Penistone Line.
"This is a great opportunity for us to develop our network and attract more people to use public transport in this part of Yorkshire."
Iain Coucher, chief executive of Network Rail, said: "This trial gives us a fantastic opportunity to see whether the types of technologies used in Europe can be adapted for use on our systems.
"We expect the lighter vehicles will result in less wear on the infrastructure - extending its lifespan, improve journey times and give the option of running future commuter services closer into city centres."
The 37-mile Penistone Line has 17 stations and is used by 1.2m passengers a year.