The approval will enable Minneapolis Metropolitan Council to begin design work on the line, which is due to be completed in 2021.
The FTA is expected to provide around half the funding required while state funds will also be requested for the $US 1bn project. Weekday ridership is expected to reach 27,000 passengers per day by 2030.
Target Field is a hub for the rail network in the Twin Cities and already serves as a terminus for the existing Blue Line and the recently-opened Green Line from St Paul as well as the Northstar commuter rail line.
The region is also developing plans for the Southwest Corridor light rail line, which would link central Minneapolis with Eden Prairie, Minnesota.