Work will commence in 2012 and will enable freight services to grow alongside passenger services.
A major element of the £54 million North London Route Improvement Plan will see the line to Camden Road doubled in size from two tracks to four.
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Geoff Hoon said: "We are increasing the capacity of this line because we want to make it easier for companies to transport goods across the county by rail which will ultimately mean there are fewer trucks and lorries on Britain's roads.
"Passengers will also benefit from the extra lines because services will be better equipped to cope in the event of unexpected disruption or planned engineering works. It will also spread the load on the network preventing bottlenecks."
The project, which also includes improvements to signalling and track layout, will start in 2012 after the London Olympics and will be completed in 2014.
(JM)
