Southern Rail will recruit more staff and replace tracks after the government handed the ailing franchise £20m (€23.8m) to get services running on time. Services across London, Surrey, Sussex and Kent have been hampered in recent months by strikes over changes to conductors' job roles and high sickness rates.
The Department for Transport has stepped in with measures to end the "unacceptable disruption for passengers".
Measures introduced will include a "passenger representative" who will listen to commuters' views and make sure improvements reflect their demands.
The fund will also put in place more rapid response teams on the franchise, accelerate the replacement of worn track and recruit extra staff at key stations including East Croydon and Gatwick to make sure trains get away on time.
The announcement came after Franchise owner Govia Thameslink Railway said it will reinstate more than a third of the 341 daily services it stopped earlier in the summer.
Transport Secretary Chris Grayling said: "I want the Southern network to be run by a team of people who work together to make sure passengers get decent journeys and that problems are dealt with quickly. This review will suggest how we achieve a joined up approach to running the train and tracks and make things work better for the public.
"We also need to get to grips with things that go wrong on this part of the network. That is why we are putting in place a £20m scheme to tackle the cause of breakdowns that too often cause frustrating and damaging delays on the network. I now urge the industry, the train operating company and unions to work together to improve services for passengers.
RMT Union members relented after three days of a five-day strike in August but further industrial action is planned for 7-8 September. General secretary of the union Mick Cash said the money was a "taxpayer bail-out" and that it should have been earmarked for guards whose roles were changing.
Govia Thameslink Railway CEO Charles Horton welcomed the injection saying it would tackle "some of the key infrastructure challenges on the network".
"Network Rail and Southern will continue to work closely together to ensure this investment delivers real, tangible benefits for our passengers and the new project board will ensure the programme is effectively delivered," he said.
"This investment complements our existing programme of improvements which is bringing in new trains and changing working practices to improve customer service."