Flood defences will be boosted with £700 million of funding, the Chancellor said.
Calendar's political correspondent David Wood is closely following the chancellor's budget speech.
GO: "we fix our plans to fit the figures" rather than the opposite as economic forecast isn't as bright as it once was #Budget2016
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Sheffield City Council leader Julie Dore said the National Infrastructure Commission report supported the council's long standing campaign to have an HS2 station located in the city centre.
The existing proposal for the HS2 Birmingham to Leeds route sites the new Sheffield station at the Meadowhall shopping centre, about three miles from the city centre, next to the M1.
Ms Dore said the report argues the importance of HS3 integrating with the wider HS2 network to enable 30 minute city centre to city centre connectivity between Leeds and Sheffield.
Each of these options (city centre and Meadowhall) should be explored to identify how a journey time as close as possible to the 30 minute aim between Leeds and Sheffield city centres could be delivered, how the most effective proposal can be achieved most efficiently and how it can best be integrated with planning for the wider HS3 network.
The Leeds HS2 station location has been reviewed to take account of HS3 and connecting our city centres. That's exactly what we need for Sheffield as well.
Not only is there an overwhelming economic case for a HS2 city centre station in its own right, but it is becoming increasingly obvious that it is also essential for delivering HS3 to link Sheffield city centre with cities across the north of England.
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George Osborne has said it is "crucial" to invest in the north of England to improve the UK economy.
The Chancellor will green light plans for Crossrail 2 and HS2 - the high speed project that will link Leeds and Manchester - in Wednesday's Budget.
A crucial part of improving the economy of our country is making sure we invest in our Northern Powerhouse and improving transport links across the north of England will be a huge boost.
Talk of government backing to develop the HS3 high-speed rail link is "no substitute for spades in the ground", a think tank has claimed.
IPPR North's director, Ed Cox, welcomed George Osborne's expected decision to give the go ahead for the HS3 rail link between Manchester and Leeds.
However, he added: "It is important to remember though that project development work is no substitute for spades in the ground and only raises expectations about the Government's ambitions for the North."