George Osborne's Budget has given the green light to Crossrail 2 and sped up the devolution of London business rates.
The National Infrastructure Commission approved the north-east to south-west railway plan last week, saying London would "grind to a halt" without it.
The Treasury will provide £80m to develop Crossrail 2 and Transport for London will match the figure.
But Labour mayoral candidate Sadiq Khan called it an "anti-London budget".
Chancellor Mr Osborne joked at Jeremy Corbyn's expense: "I know this commitment to Crossrail 2 will be warmly welcomed by the Leader of the Opposition, the Right Honourable Member for Islington.
"It could have been designed just for him, because it's good for all those who live in north London and are heading south."
Mr Osborne said the Greater London Authority would "move towards full retention of its business rates from next April, three years early."
At the moment, councils have to return up to half the business rates they collect to the Treasury for redistribution.
The change means the GLA will be able to spend business rates as it sees fit.
The Conservative Mayor of London, Boris Johnson, and the party's candidate to succeed him as mayor, Zac Goldsmith, had argued "passionately" for the change, the chancellor said.
Sadiq Khan, Labour's mayoral candidate, tweeted: "Shocked that the budget contains nothing to fix London's housing crisis."
He added: "This was also another anti-London Budget. What have the Tories got against Londoners?
"London's schools, councils and public services face bigger cuts than anywhere else in the UK. And rather than getting the green light for Crossrail 2, we got an amber light at best."
Sian Berry, the Greens' mayoral candidate, said she "welcomed" the Crossrail approval but said the Treasury would only pay half the cost and the next mayor would need plans to raise the rest.
The chancellor announced £115m would be spent to reduce homelessness and rough sleeping. Recent figures revealed a quarter of England's rough sleepers were in London, with the number up 30% in the past year.
The cash will be spent on providing 2,000 accommodation places for people leaving hostels, with £10m for prevention projects.
The British Library's plans to develop land to the north of its site in St Pancras will be supported "subject to business case approval", the Budget said.
The government will help fund the expansion of the Royal College of Art's Battersea campus.