Chancellor George Osborne has given the go-ahead for a new rail link which should see a "garden city" built on the banks of the Thames.
The Chancellor has approved a £180m extension to the Gospel Oak to Barking line.
A new station will be built at Barking Riverside where a town with a population of 29,000 - the same size as Windsor - is planned.
It follows his announcement on Sunday of a planned new garden city of 15,000 homes at Ebbsfleet in Kent.
Barking Riverside is a 20-year project to build 10,800 along with five schools on the site of the former Barking power station.
The first 350 homes are already occupied and another 350 are being built but the nearest railway station is almost three miles away.
An earlier proposal to connect Barking Riverside to the DLR network was scrapped on cost grounds.