Construction is being delivered by V/Line on behalf of Rail Projects Victoria and will continue until the end of the year.
Station upgrades will include improvements to signalling and tracks, building safer access for train crew and provide additional lighting to assist train inspections.
The upgrades will allow an additional passenger train to be stabled overnight at the station, which would mean an additional daily return train service between Shepparton and Melbourne could be introduced in early 2019.
Stage one of the Shepparton Corridor Upgrade also provided funding for 29 coach services per week between Shepparton and Seymour to fill gaps in the timetable.
An additional $313 million in funding has been announced for stage two of the project, which will upgrade level crossings, signalling and track, as well as platform extensions and a new stabling facility to allow VLocity trains to travel on the line.
Early works have also begun on a new waiting room at Shepparton station to provide a safe and weatherproof place for commuters to use.
The Shepparton Corridor Upgrade is funded as part of the $1.75 billion Regional Rail revival, which aims to upgrade each regional passenger train line in Victoria.
Minister for Public Transport Jacinta Allan said the upgrades will boost service options for passengers travelling between Melbourne and Shepparton from early 2019.
“Shepparton passengers have more to look forward to, with these works just the first step in a $356 million investment to bring faster and more frequent services to the line,” she said.