George Osborne has confirmed that HS2 trains will run to Crewe by 2027 - six years earlier than originally planned.
The decision follows on last year’s recommendation by HS2 boss Sir David Higgins to speed up construction of the second phase of the £50bn high-speed railway project.
Originally, HS2 was expected to link London with Birmingham by 2026 and subsequently reach Manchester and Leeds by 2033.
"Bringing forward this part of the HS2 route by six years is a massive step in the right direction for the Northern Powerhouse where high speed rail will play a big role in connecting up the entire region with the rest of the country," Osborne said.
The Chancellor also announced that former CBI chief John Cridland is to become the first chair of Transport for North, with a remit to improve connections across the region.
Sir David, who is also publishing a report today recommending a new hub station in Leeds, said: "This is another significant milestone in the development of Britain's high speed rail network.
"By accelerating the second phase between Birmingham and Crewe, we will bring the capacity, connectivity and regeneration benefits of HS2 to the North-West and Scotland years earlier than originally planned.
"It has also been very gratifying, as we develop the plans for Phase Two, to see a consensus grow among the city regions in the East Midlands and Yorkshire on the siting of future hub stations at Toton and Leeds city centre respectively."
Osborne said that last week's Spending Review had heralded the biggest rise in transport investment in a generation.
The director general of the Institution of Civil Engineers, Nick Baveystock, welcomed the acceleration of construction of the Birmingham-Crewe line, saying: "The North needs the benefits of high speed rail as soon as possible.
"We know from experience that greater continuity between the two phases of a project can create a positive impact on the UK's engineering skills pipeline, as the workforce does not need to be retrained or stood down halfway through."
However, shadow transport secretary Lillian Greenwood was more sceptical about the government’s delivery on its promises.
"Ministers have delayed HS2's legislation by 18 months, electrification of key lines in the North have been put back by years and passengers were hit last year by fare rises of up to 162 per cent.
"Investment in transport is welcome, but at some point the Chancellor has to stop promising and start delivering. HS2 is vital for relieving chronic capacity constraints on our overcrowded rail network. The Government must now get on with building this important project."