Plans have been announced to electrify the Glasgow's Queen Street to Edinburgh Waverley train route - cutting 10 minutes from journey times.
The £650m upgrade will deliver longer trains equipped with wi-fi in a move that could create hundreds of new jobs.
Queen Street Station will be revamped and a new station will see services from Fife connect to Edinburgh Airport.
Cumbernauld line services will also be electrified ahead of the 2014 Commonwealth Games in Glasgow.
Details of the project were outlined by Transport Minister Keith Brown during a visit to Queen Street Station.
He said: "I am very excited to be announcing the details of the Edinburgh Glasgow Improvement Programme (EGIP), which will take train journeys on Scotland's busiest commuter route into the next generation.
"These enhancements to the service will be a massive boost for both cities, and all the communities which surround them, as well as benefiting Scotland's economy as a whole through additional jobs and investment.
"And of course, passengers will enjoy quicker journeys, full wi-fi connectivity and better trains."
The programme will allow train services from Fife to connect with Edinburgh Airport via a new Edinburgh Gateway Station.
The plans also involve transforming Queen Street Station into a "world-class integrated transport hub".
The announcement follows confirmation from Network Rail last year that it was to carry out a multi-million pound redevelopment of the station between 2013 and 2015.
A new glass frontage will be added to the station's George Square entrance. Inside, the concourse will be extended, a new mezzanine level food court added, along with an atrium link to the Buchanan Galleries shopping centre.
Original estimates placed the cost of the Edinburgh Glasgow Improvement Programme at about £1bn.
Mr Brown said the Scottish government had "revamped" the plans to deliver savings of more than £300m.
The reduced budget will mean that there will be no immediate increase in frequency of services between Glasgow and Edinburgh.
The planned electrification of Dunblane/Alloa services will also not be delivered in this phase of improvements.
These delays were criticised by the sustainable transport alliance, Transform Scotland.
Director Colin Howden said: "Today's announcement is merely a restatement of promises that the Scottish government has already made.
"What the government is actually announcing today is cuts to the Scotland's flagship rail project.
"Instead of the previously-promised six trains per hour, we're now only going to get four trains per hour. Furthermore, electrification will no longer reach Dunblane and Alloa.
"If completing these further phases is dependent on a new high-speed line reaching Scotland then the government is simply kicking these previously-promised investments into the long grass."
The Scottish Chambers of Commerce welcomed progress towards the electrification of the Glasgow to Edinburgh line but said the Scottish government's decision "to implement only a part of its original plans" was "disappointing".
Chief executive Liz Cameron said: "Whilst improvements in journey time, station facilities and the rapid acceleration of wi-fi capabilities in the ScotRail fleet are extremely welcome, EGIP was a project which had the potential to be transformational in terms of its impact on connectivity across central Scotland and, sadly, it looks as though this potential may fail to be realised.
"The new plans that have been announced fail to achieve the improvements in journey times that have been promised, fail to guarantee the pledged electrification of the network to Stirling and Dunblane and fail to deliver the six trains per hour between Glasgow and Edinburgh that business travellers have been demanding."