The aim is to improve freight infrastructure on four projects across the country and reduce dependency on road transport, removing around 300,000 lorry journeys from the roads annually.
£80 million of funding is being awarded to enhance gauge and capacity for rail freight on the Peterborough - Nuneaton route, providing an alternative to the busy rail routes via London.
Almost £43 million is being provided to enhance the gauge on the key Southampton - Nuneaton corridor, which links one of the UK's major ports with Birmingham, the northwest and Scotland through the West Coast Main Line.
£8 million of funding is awarded to increase capacity on the link between the Humber Ports and the East Coast Main Line, including to the power stations in the Aire and Trent Valleys.
£1.7 million is being provided to improve access between the West Coast Main Line and Liverpool Docks by reinstating a new section of track and enhancing the gauge on two rail routes.
Transport Minister Tom Harris said: "This improved infrastructure we are funding will make a significant contribution to reducing road congestion, carbon and environmental emissions, as well as supporting the future growth of our economy. In this way everyone wins.
"This funding is on top of the £65m the DfT announced earlier this year to support freight through upgrading infrastructure and securing greener ways of moving the nation's goods. Together, these awards underline the Department's commitment to improving the rail freight network in this country."
All four schemes have been rated as delivering high value for money by the Department for Transport. Network Rail will start the construction of these projects in early 2008, enabling all schemes to be completed by 2011.