Plans for a system which is expected to cost £20m, similar to what is used by Transport for London, has been proposed where passengers would pay via a pass, band card or smartphone.
It would substitute the West Midlands’ Swift card and Nottingham’s Robin Hood travel card, with plans to extend the scheme outside big cities.
The existing systems would be replaced within two years and regional leaders have said Leicester and Derby would be included by 2024.
Described as a "tap and cap" system, the payment model would limit commuters' daily spend on rail, bus and tram travel.
Andy Street, the Mayor of the West Midlands, said the central funding would allow payments to be capped and help to support "more flexible travel patterns" seen since the start of the coronavirus pandemic.
Nottingham City Council leader David Mellen said the scheme would allow "seamless travel between the towns and cities of the Midlands" and ensure public transport remained "practical and affordable".
