Mayor Denis Coderre made the announcement at City Hall on Wednesday morning.
He said roads and infrastructure have fallen victim to decades of underinvestment and badly needed maintenance.
Coderre said it was better to spend the money now, than to spend more later on expensive emergency repairs.
The capital works budget was boosted by nearly $800 million.
Coderre also announced that the city would commit $300 million to Montreal’s 375th anniversary, in 2017. He said a number of cultural institutions, including the Biodome, Jean Drapeau Park and the Pointe-à-Callière Museum, would also benefit from some additional investment.
He added that he wanted to ensure projects the city is committing to will actually get done, citing a 39.1 per cent completion rate for city projects in 2013.
He said he hoped his administration would improve that number by 25 per cent through better organization and management.