The Milton Keynes Partnership - the agency charged with overseeing the massive development plans - has won finanicial support for two key schemes from the ODPM.
The quango has won funding to both improve the city's rail infrastructure and develop a new infrastructure tax to pay for more improvements.
The green light for these projects will give new momentum to the plans to massively increase the size of the Buckinghamshire conurbation, which is a key element of the vast housebuilding proposals in the ODPM's Communities Plan.
This growth plan has met with serious opposition from locals, who believe that more housing will undermine the planning strategy put in place when the city was first proposed in the 1960s.
But Bob Reid, chairman of the Milton Keynes Partnership, insisted that the government cash was good for the city.
'This is great news for Milton Keynes,' he said. 'This is something I have worked hard to win for the city. It strengthens our links to London and north to Birmingham.
'This is a real boost for the local economy and makes us a much more attractive investment location.'