Premier Alison Redford announced the funding at a news conference in a below-ground rail station in the city's downtown.
She says the province will provide $250 million in grants and up to $150 million in funding contingent on matching money from the federal government.
There will also be an interest-free loan to the city for $200 million.
Redford says with perhaps a million newcomers calling Edmonton home in the coming years, it is important to fund the transit line, which will link up the city's southeast.
City leaders had expressed disappointment with Redford's government last week when money for the line was not in the 2014-15 budget.
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