The strategic research will take place alongside Highways England.
The study is one of a number of studies which will help identify solutions to tackle congestion and act as an 'enabler' to economic growth.
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It will investigate the strategic and economic case for a new high-standard highway route between Manchester and Sheffield, including the potential of combining with a rail or light rail link.
It is anticipated the new route will cross the Pennines and the Peak District National Park by means of a road tunnel which will extend for several miles in length.
Road Minister Andrew Jones said: "As part of our long-term economic plan we are investing a record £13 billion in transport for the North and North-East.
"Today’s announcement will look at building stronger links between Manchester and Sheffield, meaning more jobs and opportunities for people across the region."
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