Funding support for York's National Railway Museum, Coventry's 2021 UK City of Culture programme and infrastructure and maintenance work at local and regional museums across the country are all included in the UK Government's proposed new Culture Investment Fund.

The £250m (US$322m, €290m) funding package from the Department for Digital, Culture, Media & Sport (DCMS) over five years includes more than £125m (US$161m, €145m) that is earmarked for investment in upkeep and improvements to regional museums and libraries.

The National Railway Museum has been allocated £18.5m (US$23.8m, €21.4m) to kickstart its planned major transformation, which includes new gallery and exhibition spaces, improved accessibility and the restoration of heritage buildings.

Coventry receives £7m (US$9m, €8.1m) from the fund, unlocking £37m (US$47.7m, €42.9m) of additional funding, and over £107m (US$137.8m, €123.9m) of tourism impacts.

In addition, the Cultural Development Fund – which uses investment in heritage, culture and creativity to drive regeneration and growth – will be extended by another five years with total funding of more than £90m (US$115.9m, €104.2m). This will enable 20 places across the country to transform their local cultural and creative industry infrastructure.

The investments will be delivered by DCMS, with Arts Council England having a key role in distributing the fund, and the National Lottery Heritage Fund and Historic England playing important roles, particularly in the delivery of the museums maintenance fund.

The UK's culture secretary, Nicky Morgan, said: "The Cultural Investment Fund is the Government's biggest ever single investment in cultural infrastructure, local museums and neighbourhood libraries, and will benefit communities across the country. This will help drive growth, rejuvenate high streets and attract tourists to our world-class cultural attractions."

As the recipient of the largest single contribution from the fund, the National Railway Museum in York will now be able to press ahead with its plans, which will see the redevelopment of the largest city centre brownfield site in Europe to become the cultural hub of York Central. Some 6,500 high-value jobs and 2,500 new homes are also projected to result from the development.

Judith McNicol, director of the National Railway Museum, said the investment was "an extremely significant milestone in realising our £55m Vision 2025 campaign to turn our museum into a truly world-class attraction". She added: "It is the springboard for unlocking our role as the cultural heartbeat of York Central – one of the most ambitious regeneration projects in Europe."