Manchester Metrolink's planned extensions to the east and south of the city have survived government cuts.
The Department of Transport has confirmed the new routes to East Didsbury and Ashton-under-Lyne will receive their planned funding.
The government is expected to provide £85m of the £170m cost with the remainder coming from the Greater Manchester Transport Fund.
Eight extra trams and two new park-and-ride sites will be provided.
Andrew Gwynne, Labour MP for Denton and Reddish, said: "Given that substantial public funds had already been spent in preparing the route, it would have been a scandal if the line had been scrapped.
"This will be a real benefit to local people and improve the local transport network."
Mr Gwynne said that the extension to Ashton-under-Lyne will also help safeguard 1,768 jobs created under the Tameside Economic Zone, as companies have located to the area because of the planned Metrolink.