Bay Area transportation officials have agreed on a $1.5 billion plan to work with the High-Speed Rail Authority to electrify Caltrain and install advanced train-control systems to build a hybrid rail system accommodating both commuter and high-speed trains.

Under the proposal, released late Wednesday, the Bay Area would receive $706 million in state high-speed rail bond money, with the rest of the funds coming from local sales taxes, other state and federal funds, bridge tolls and air district money.

"This is a great leap forward for transportation in our region," said Jim Wunderman, president of the Bay Area Council, a regional business group. "Electrifying Caltrain is one of the top priorities of the CEOs we represent. Electrification will boost ridership, clean up our air and remove thousands of cars a day from Highway 101. At the same time, it lays the foundation for high-speed rail to come to the Bay Area."

Caltrain officials have long planned to electrify their rails, which they say will allow them to run faster, more frequent and quieter trains.

The plan, which will be considered by the Metropolitan Transportation Commission Wednesday, is part of a new strategy by the High-Speed Rail Authority to speed the arrival of fast-moving trains in the Bay Area and Los Angeles by investing in upgrades to commuter rail lines to prepare them for high-speed rail. The approach would also reduce the estimated $98 billion cost of building the system, said Dan Richard, chairman of the authority board.

The authority, which plans to start construction of the nation's first high-speed rail line late this year in the Central Valley, has invited proposals from Los Angeles and the Bay Area to use a portion of the $9.9 billion in high-speed rail bond money for regional improvements that also pave the way for fast trains. Board members also hope it will stem criticism over starting construction of the line in the Central Valley, a decision that has caused many to label the project "the train to nowhere."

The authority's board of directors is expected to consider the agreement with the Bay Area at its April 5 meeting. Earlier this month, it approved a similar pact with Southern California transportation agencies.

The Bay Area plan calls for construction of a Caltrain extension to San Francisco's new Transbay Terminal, high-speed train facilities at Diridon Station in San Jose and in Millbrae, along with improved Caltrain tunnels, bridges, passing tracks and rail crossings. But it puts the highest priority on electrification and train controls, which Metropolitan Transportation Commission spokesman Randy Rentschler described as "the gateway to the future of a high-speed rail system when additional funds become available. But there's also something in it today for voters to get something they've wanted for years."

While the agreement does not include the funds to take Caltrain and high-speed rail to the Transbay Terminal, Gillian Gillett, Mayor Ed Lee's transportation adviser, said that remains part of the plan and a high regional priority.

"It means we have a path forward to the downtown extension," she said. "We have momentum."