In a statement, Number 10 said that the new fund would place cities "at the heart of our industrial strategy".
The statement said that the Transforming Cities Fund "will address weaknesses in city transport systems in order to raise productivity and spread prosperity".
"It will fund new local transport links, making it easier to travel between often more prosperous city centres and frequently struggling suburbs," the statement added.
"This will help make sure people across the country have better options to combine different modes of transport," the statement continued.
It said that the fund would support projects "which will improve connectivity, reduce congestion and introduce new mobility services and technology".
Transport secretary Chris Grayling said: "The Transforming Cities Fund will drive productivity and growth in cities where this is most needed, connecting communities and making it quicker and easier for people to get around.
"We have already seen the impact of better integrated transport links for both passengers and the local economy in cities like Nottingham and Manchester. This new fund will enable more English cities to reap these benefits."
A Department for Transport spokeswoman said that further details would be announced in Wednesday’s Budget.