The proposed line includes new stations in some locations, while in others it would serve existing stations with alterations.
It will run up to six trains an hour connecting town centres including Brent Cross, Neasden, Old Oak Common, Brentford and Hounslow.
Four west London councils are to contribute spend and a public consultation on the plans will take place later this year.
The £6.65m funding is being split equally between Transport for London and the boroughs.
The funding will support design of stations and other infrastructure, modelling and public consultation ahead of a 2027 decision on seeking statutory powers.
Mayor of London, Sadiq Khan, said: ”I’m pleased and proud to bring partners together so we can deliver the missing link in public transport for the north and northwest part of the capital. Adding a new line to our fantastic London Overground network will help drive regeneration and economic growth not only along the new route but across our great city. I look forward to seeing the homes, jobs and opportunities unlocked by this innovative rail project as we continue building a better, greener, more prosperous London for everyone.”
