The money is part of $8 billion in stimulus grants that President Barack Obama has set aside for high-speed trains and other passenger rail projects.
Ohio is planning a 79-mph startup service that will run on existing freight tracks connecting Cleveland, Columbus, Dayton, and Cincinnati beginning in 2012.
It figures to be a marquee stimulus project, billed as a jobs creator in an important swing state where Strickland, a Democrat, is facing re-election.
Obama planned to be in Florida on Thursday to announce additional stimulus awards for rail projects.
``Competition for this was stiff, and I'm very appreciative,'' Strickland said. U.S. Transportation Secretary Ray LaHood called him with the news, he said.
About 6 million people live along the 255-mile Ohio train route, making it one of the most heavily populated corridors without rail service in the Midwest—a major selling point that state transportation officials made in their October stimulus application.
Private passenger train service on the route ended 40 years ago.
Ohio had asked for $564 million in stimulus money, considerably more than it ended up getting. The state could scale back its plan by purchasing refurbished rail cars instead of new ones, said Ken Prendergast, executive director of All Aboard Ohio, a rail advocacy group.
Amtrak released a study in September predicting that a restored service in Ohio would draw 478,000 riders in its first year and has the demographics needed for successful operations, including population density and a concentration of colleges and universities.
The state aims to build up ridership and gradually make infrastructure improvements so that tracks can handle 110 mph trains, with branches connecting to a Chicago-based Midwest corridor and East Coast cities.
Ohio hasn't picked a company to operate the service, though Amtrak is interested.
Norfolk Southern Corp. and CSX Corp., two companies that own most of the rail lines on the route, have said they support the project as long as passenger and freight operations don't conflict.
Amtrak hasn't estimated fares for Ohio, but the state estimates an average ticket price for a one-way trip from Columbus to Cleveland would be $20, and $18 from Columbus to Cincinnati. Annual ticket sales are estimated at $12 million, with the state responsible for an additional $17 million operating subsidy.
That has drawn criticism from highway construction lobbyists, who worry that Ohio would divert money from road projects to pay for the train subsidy. Republican state lawmakers also have raised questions about where the money will come from.
Strickland said $17 million is a modest amount compared with the hundreds of millions that the state spends on highways every year.
Ohio transportation officials plan to use a mix of funding sources to cover the subsidy, including train advertising, federal grants and fees that restaurants, hotels and gas stations pay to advertise on blue highway exit signs.
Amtrak's study also didn't address the costs that cities on the route would have to pay to build train stations, which, depending on their size and features, can cost as low as $2 million or as much as the $26.4 million transportation hub that opened two years ago in St. Louis.
Total travel time on the route would be 6 hours and 30 minutes. That's about what it would take to drive the same corridor, but longer than a more direct route between Cleveland and Cincinnati on Interstate 71 that takes 4 1/2 hours by car.
Time isn't the only factor that determines ridership, state transportation officials have said. Cost, safety, reliability and passenger convenience are other important factors. Ohio anticipates that the trains would be equipped with Wi-Fi service.