The scheme is hoped to ease growing congestion in the two major urban centres, as their economies and tourism both boom.
In Lisbon the plan includes two new underground stops and an overhaul of the Cais do Sodre district, the main hub for trains, metro and ferry boats. In Porto there will be four new stations and a new metro line.
The investments in Lisbon would be €210m and in Porto €370m. The expansion is set to start in the first half of 2019 and finish by 2023. However, a tender for contracts has yet to be launched.
The minority socialist government’s budget bill for 2019, which was approved last month, included plans to reduce the price of public transport.