Investment in major transport projects is to increase over the current Parliament, by 50% to £61bn, Chancellor George Osborne has announced as part of the Spending Review.
He called it "the biggest increase in a generation" on road and rail projects.
As part of it, he said work on the HS2 high-speed railway linking the north of England to the south could begin.
However, while capital spending will rise, the Department for Transport's operational budget will fall by 37%.
Mr Osborne also announced that the electrification of three major rail arteries will go ahead.
These are the Trans-Pennine in northern England, Midland Mainline in central England and Great Western route from London across south-west England to Wales.
There will also be "the biggest road building programme since the 1970s", he said.
Other projects which Mr Osborne has announced as part of spending on the sector are £11bn for transport in London, and some £300m for cycling in the UK.
Transport for the North, a body which brings together transport and local authorities across the north of England, will be established.
Anthony Smith, chief executive of independent user watchdog Transport Focus, said: "Rail passengers will be relieved to hear that the big projects designed to relieve overcrowding and lead to more reliable journeys have been protected.
"Users of the strategic road network will be relieved to see that the five-year programme of investment will be maintained.
"But those who use the bus will be wondering how these changes will affect their local journey."
And Penny Gaines, chair of pressure group Stop HS2, said: "HS2 is clearly a white elephant. Transport in the North does need improvement, but it isn't the links to London which are holding back the economies of the North.
"It's the ability to cross the Pennines, it's getting into city centres from local towns. This is where the money needs spending on transport, not on one big showy railway line."
Autumn Statement and Spending Review 2015
Presented by Chancellor George Osborne, the Spending Review sets out what government spending will be over the next four years, while the Autumn Statement is an annual update of government plans for the economy.
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Mr Osborne said there would be a quarter of a billion pound investment in facilities in Kent to assist the handling of freight lorry movements, as part of Operation Stack.
In addition, he said some £5bn would be spend on roads maintenance.
But his new £250m central fund for combating potholes was described as "a drop in the ocean in terms of the scale of the problem" by RAC chief engineer David Bizley.
The government also said it would "deliver on commitments to freeze regulated rail fares at no more than inflation (RPI) for the entire Parliament".
And it said it would look to devolve "significant transport powers to mayor-led city regions, including Greater Manchester, Sheffield city region, Liverpool city region, the North East, Tees Valley and the West Midlands".