Contracts have been awarded for the Edinburgh to Glasgow improvement programme (Egip), which has risen in cost from £650 million to £741.5m.
Much of the extra money will be spent lengthening platforms at Queen Street to allow for longer trains to meet passenger demand and integrating the station with Buchanan Galleries shopping centre.
Egip was announced in 2009 to improve reliability, capacity and journey times between Scotland's two biggest cities.
The Queen Street redevelopment, which has more than doubled in price from £49m to £120m, is not expected to contribute to cutting journey times but will add to the "accessibility and ambiance" of the station and wider public realm, according to a full business case by consultants Ernst & Young.
The cost of electrifying the line via Falkirk to make trains faster has been cut by one-fifth to £248m. Land, infrastructure and contingency costs have also been adjusted.
Transport minister Keith Brown said yesterday: "I welcome the contract award on the core electrification of the route and the hundreds of jobs this will support.
"This announcement represents another hugely important milestone in the delivery of Egip and shows that we are pressing ahead with the improvements which will give Scotland a railway fit for the future.
"Passengers will experience the benefits of a faster, more comfortable and more efficient railway. But the whole of Scotland will also enjoy the boost to our economy and environment.
He said that, in addition to the new £25m building at Haymarket station in Edinburgh, the electrification of the Cumbernauld lines is still due in time for this summer's Commonwealth Games in Glasgow.
Mr Brown hailed "hundreds of millions of savings for the public purse" when the cost was cut to £650m in a 2012 strategic review, which recommended a phased reduction of journey times to make Egip's goals "more affordable and achievable".
Journeys of at least 42 minutes, rising to 44 mins at peak time, are now expected by 2019 and shorter 37-minute journeys are expected by 2025, according to the full business case.
The redevelopment of Queen Street is not expected to contribute to improved journey times.
The business case added that Queen Street was one of Scotland's busiest stations and the work would 'align' it with the extension of the nearby Buchanan Galleries mall.
Labour transport spokesman Mark Griffin said: "I am still baffled as to how Keith Brown can claim this project is on track and charging ahead when it has been delayed and scaled back almost beyond recognition."
He alleged that large parts of vital information had been removed from the public version of the document, "which makes me wonder what else the SNP government are trying to hide."
Conservative transport spokesman Alex Johnstone said: "The Scottish Government has already scaled back on their original plans for Egip.
"Now, we find the costs rising to almost three-quarters of a billion pounds for a project completely lacking in ambition."