Investment will unlock a key employment site situated at Junction 25 just off the M5 with the belief that this could create up to 4,000 new jobs, and bring forward a new enterprise centre in Wiveliscombe and help expand superfast broadband to the more rural parts of Taunton Deane.
The bid will bring in £13m towards the overall £16m costs of the J25 improvements with the balance coming from both public and private investment. Work could start in 2016-17 with estimated completion in 2018-19.
Now the funding is confirmed, work can start on the details before public consultation and the planning process can now get underway.
The award follows the announcements in 2014 for a £4.6 million investment in improvements to Taunton railway station and the £275m dualling of the A358 between Taunton and Ilminster linking the M5 to the A303 as part of a new 'Expressway' between London and the South West, via Junction 25 at Taunton.
The latest announcement sees £65.2 million awarded to the Heart of the South West Local Enterprise Partnership (HotSW), on top of £130 million agreed last summer.
Leader of Taunton Deane Borough Council, Councillor John Williams, said: "The investment in our area demonstrates the absolute confidence in Taunton Deane as a place that really does mean business.
"We have always been ambitious, with a clear vision for economic growth. Those ambitions are being realised as a result of drive, commitment and sheer hard work with tremendous help and support from Somerset County Council, businesses and other key partners.
"Taunton Deane is ideally placed within the South West with existing good transport links - these will now become first class with investment in the railway, the M5 junction and the A358 expressway.
"It also means that our employment will go hand in hand with our growth - a principle that we established when we launched our Growth Prospectus in 2014.
"This news gives us reason to celebrate and to be immensely proud of Taunton Deane and what we can achieve by working together to the benefit of our community."
Councillor David Hall, Conservative-controlled Somerset County Council's Cabinet Member for Business, Inward Investment and Policy, said: "Our county is seeing a huge amount of investment at the moment and this is further evidence that the future is bright for Somerset.
"The Junction 25 scheme is another massive boost following the recent A358/A303 announcement and will further improve connectivity as well as unlocking the growth potential of the site, creating business opportunities and providing up to 4,000 jobs.
"I'm also pleased to see continued investment into superfast broadband and enterprise centres supporting small businesses. Growing our economy is a top priority and I'm sure the Somerset business community will join me in celebrating this welcome news."
The J25 employment site proposals have won the support of local and regional business leaders and would cover an area the size of 25 rugby pitches. It would fulfil a market need for businesses needing space close to the motorway and within easy reach of the town centre, excellent local schools and first class leisure facilities.
However, all partners involved recognised from the outset that J25 and the A358 would need to be significantly upgraded - hence the bid for Government funding.
Tudor Evans, a board member of HoTSW, said the improvements were vital to delivering growth, adding: "The Unlocking Growth Fund is an exciting project that will unlock employment sites and develop business locations across the Heart of the South West, helping to boost productivity and create jobs."
The extra investment in superfast broadband is also to be welcomed, it will concentrate on improving coverage in the hard-to-reach rural areas, again a significant boost for business and the wider community.