The largest share of the money - nearly $800 million - will be used to upgrade train speeds from 135 mph to 160 mph on critical segments of the heavily traveled Northeast Corridor, LaHood said at a news conference in New York's Pennsylvania Station, the nation's busiest train depot.
The projects should also improve the reliability of other commuter lines, such as New Jersey Transit and the Long Island Rail Road, by improving electrical lines on shared sections of track and allowing Amtrak trains to bypass a major junction in New York City, LaHood said.
Officials in the New York area had lobbied heavily for the money, noting that the stretch between Washington and Boston is the country's most-traveled rail corridor.
"This is what our friends around here have been asking for," LaHood said.
Another $404 million will go to expand high-speed rail service in the Midwest, including newly constructed segments of 110-mph track between Detroit and Chicago that are expected to save passengers 30 minutes in travel time.
Nearly $340 million will go toward state-of-the-art locomotives and rail cars for California and the Midwest. California will also get another $300 million toward trains that will travel up to 220 mph between San Francisco and Los Angeles.
"These projects will put thousands of Americans to work, save hundreds of thousands of hours for American travelers every year, and boost U.S. manufacturing by investing hundreds of millions of dollars in next-generation, American-made locomotives and rail cars," Vice President Joseph Biden said in a statement.
President Barack Obama has sought to make creation a national network of high-speed trains a signature project of his administration. He has said he wants to make fast trains accessible to 80 percent of Americans within 25 years.
The money - initially $2.4 billion - had been awarded to Florida for high-speed trains between Tampa and Orlando. After Gov. Rick Scott canceled the project, the Transportation Department invited other states to bid for the funds. It received 90 applications seeking a total of $10 billion.
Scott said he had been concerned that the state government would be locked into years of operating subsidies. However, a report by the state's transportation department forecast the rail line would be profitable. The project initially had been approved by Scott's predecessor, Republican-turned-Independent Charlie Crist.
Two other Republican governors elected in November have canceled high-speed train projects in their states.
Wisconsin Gov. Scott Walker turned down $810 million to build a Madison-to-Milwaukee high-speed line. Ohio Gov. John Kasich rejected $400 million for a project to connect Cincinnati, Cleveland and Columbus with slower-moving trains. Both the Ohio and Wisconsin projects had been approved by the governors' Democratic predecessors.
Republican members of Congress have also opposed funds for high-speed trains, rescinding $400 million of the money previously awarded to Florida, as well as other unspent money designated for trains in budget deliberations with the administration.
Associated Press writer Joan Lowy in Washington contributed to this report.