Transport bosses want to open a station at Aldridge, which would cater for 500,000 passengers a year with two trains an hour running to Birmingham New Street and Walsall.
It forms part of plans which will also see new stations at Darlaston and Willenhall, while a station at Tettenhall, Wolverhampton, has also been mooted.
Aldridge last had a station in 1965. It was one of hundreds closed under the controversial Beeching cuts.
Transport for West Midlands (TfWM) has agreed to buy NHS-owned land next to the Anchor Meadow Health Centre off Westfield Drive to get the scheme up and running.
West Midlands Mayor Andy Street, said: “Securing this land means we can press ahead with our plans to give Aldridge its own station for the first time in more than half a century.
“Alongside Aldridge we have Darlaston and Willenhall, which will be the first new stations to be built as the Walsall to Wolverhampton line re-opens to passengers, and we are also exploring the prospect of having a new station at Tettenhall.
"All of these and more form part of our transport plan for the region, which is so desperately needed after decades of under investment in public transport.
“Alongside new and expanded Metro lines and Very Light Rail in Coventry, both of which are at the heart of our transport plan, new and re-opened stations provide better transport links as well as helping to drive economic growth.
"This will be crucial as we look to recover from the coronavirus pandemic and recapture the region’s previous economic momentum.”
Councillor Mike Bird, West Midlands Combined Authority portfolio holder for housing and land and leader of Walsall Council, said: “Without this land we would not be able to build the new station so this funding is tremendous news for Aldridge and means the scheme remains viable.
“Having its own station is a major economic boost for any town or suburb and it enables local people to get quickly and easily to jobs or education opportunities further afield."
Aldridge and Brownhills MP Wendy Morton, said the deal was a "hugely exciting step forward".
“Reopening these older stations is about linking up communities to the regional transport network Andy Street building in the West Midlands. In Aldridge’s case it would be about enabling local residents to commute to Walsall and then on to Birmingham and beyond.”
The original Aldridge Station was opening by the Midland Railway in 1879. In 1923 it became part of the London, Midland and Scottish Railway before passing to the London Midland Region of British Railways on nationalisation in 1948.
Initial plans for the station include a 150-space car park. It is expected to open in 2023.