The multi-billion pound Northern Powerhouse Rail (NPR), first proposed over a decade ago, has been revived by the Government.
The scheme aims to deliver faster journeys and more frequent trains across the North through a combination of upgraded and new lines, and improvements to stations.
There is also scope for a new Birmingham-Manchester line after the decision to abandon the northern extension of HS2 was taken as a cost-cutting measure.
An initial £1.1bn has been earmarked for design and preparation. Construction is not expected to start until after 2030. It will be delivered in phases, starting with upgrades to lines between Leeds, York, Bradford and Sheffield, the government said.
The government said the "transformation" of travel in the North would shorten commutes and encourage investment across the region, adding up to £40bn to the British economy.
Prime Minister Sir Keir Starmer said the cycle of "paying lip service to the potential of the North" had to end: "This government is rolling up its sleeves to deliver real, lasting change,.”
Shevaun Haviland, Director General of the British Chambers of Commerce said: “For far too long the North has been left to languish and missed out on the crucial investment in infrastructure needed to realise its economic potential.
“If Northern Powerhouse Rail can be delivered in its entirety, on time and to budget, then it will have a transformational impact.
“Businesses across the region, and beyond, will welcome the government’s commitment to making this happen and the substantial £45bn budget envelope that has been set.
“But they will also be wary; with no current end date for the project or set timelines on delivery, it is vital that government fills in the blanks as soon as practicable.
“Firms will want absolute certainty on the government’s capability to deliver this project before they will fully invest in the future opportunities it could bring.”
Mark Goldstone, UK Competitiveness Manager, CBI, said it fully supports the government’s ambitions for greater connectivity and further economic development across the North of England.
“Getting on with Northern Powerhouse Rail is about far more than simply delivering a rail project,” he explained. “It’s a transformative opportunity to connect local economies, unlock regional growth and create vibrant hubs and thriving communities all the way along the proposed Northern Growth Corridor.
“The government must now use this moment as a springboard to press ahead with other important infrastructure projects that will catalyse jobs, investment and growth across the country.”
Amish Patel, Transport Leader, PwC UK said: “The renewed commitment to Northern Powerhouse Rail is a significant and welcome step towards addressing the North’s long-standing connectivity challenges and barriers to productivity and growth. The strategic intent is right: better transport links are essential to unlocking growth, widening labour markets and attracting sustained private investment across the region.
"The focus must now shift decisively from ambition to delivery. That means sequencing investment carefully, securing early and visible benefits, and ensuring the right delivery capabilities are in place in the right locations at the right time. Major programmes of this scale succeed not just through funding, but through strong governance, commercial discipline, and a realistic approach to skills and supply-chain capacity.
"If Northern Powerhouse Rail is delivered as part of an integrated economic system - aligned with housing, skills and local growth plans, and led in genuine partnership with city regions - it has the potential to be truly transformational for the North and for the UK economy as a whole.”
