The Nene Valley Youth Group, which is part of Peterborough's steam attraction, Nene Valley Railway, has been awarded the grant by London North Eastern Railway (LNER.
The funding will help the group, created a decade ago to encourage young people into the railway world, expand and improve its volunteering experiences.
It will allow the group to increase the number of places it can offer from 12 to 30. Extra equipment and improved facilities for volunteers are also planned.
The youth group seeks to provide young people between the ages of 12 and 18 the opportunity to develop their inter-personal skills, learn basic engineering and improve their knowledge of the railway.
Philip Marshall of the Nene Valley Railway Youth Group said: "It is a very rewarding experience being able to provide training opportunities for the local young people, see them embrace this with vigour and determination and apply successfully for the fantastic job opportunities provided by LNER and the engineering industry.
"Obtaining the professional support of LNER and the CCIF funding, provides a tremendous opportunity to expand the youth group and its facilities.”
The new funding will mean that more youngsters will be able to benefit like Adam Paice, who joined the Youth Group at 13 and went on to manage Overton Station and edit the NVR, the International Railway Preservation Society journal.
Using the skills and knowledge he gained from the group, Adam was able to start a career in the railway industry and is now a Train Manager with LNER, which operates the mainline rail services through Peterborough.
Rachael Wilson, Station Partnership Project Manager at LNER, said: “The work that the Nene Valley Youth Group undertake is fantastic.
"We have directly benefited from it, with the hiring of Adam, who hit the ground running as a Train Manager due to the skills and knowledge that he developed with them.
“We are very happy to be providing them with the funds they need to engage with even more young people within Peterborough.”
The support given by LNER is part of their Customer and Community Investment Fund which sees £500,000 up for grabs each year.
The next round of funding opens this summer and LNER is keen to hear from charities, community groups, other types of not for profit organisations and individuals who are looking to address a social issue that affect our people, customers and communities and allows us to make a positive impact on society.
For more details on the themes that are of key importance to LNER and previous projects supported, visit www.lner.co.uk/CCIF.