Chancellor George Osborne said HS2 will be a "huge boost" in the North West and will create thousands of jobs.
The second phase of the HS2 high speed rail network is still subject to a consultation, but the government is proposing building could begin around 2025, with the line opening by 2033.
Osborne spoke to ITV News about the announcement at his visit to Lucchini UK, a Manchester-based manufacturers, which makes train wheels and other specialist items for the railway industry.
Chancellor George Osborne has been accused of trying to divert the route the planned high-speed HS2 rail line will take.
Plans to extend a high speed rail line to Manchester have been announced by the government