The four-year funding package announced by Chancellor Rachel Reeves in the Budget on November 26.
It is the region's first ever multi-year settlement and is the latest step in an unprecedented shift in power, money and responsibility from Westminster to the West Midlands.
The long-term funding gives the Mayor and other political leaders the ability to better plan and deliver major projects that can drive growth and tackle poverty.
The Mayor, Richard Parker, said he will use the money to drive forward his West Midlands Growth Plan which sets out to create 100,000 jobs, 120,000 new homes and better public transport.
Mr Parker said: "The Chancellor has today backed the West Midlands with a £2.5billion settlement to drive growth in every part of our region - and it puts fairness at the centre of that plan. It will lift children out of poverty, strengthen our public services and support working people with a proper living wage.
"This is a Budget that helps to rebuild our region from the ground up. It gives us the tools to get homes built, improve our buses and trains, boost skills and bring new investment into our towns and cities.
"After years without meaningful growth, this Budget makes responsible choices for a fairer economy and better opportunities for the people of the West Midlands."
The four-year funding package announced in today's budget includes £530m for skills and job support, £177m for new homes, £232m for economic regeneration, £129m to support the environment and fight climate change and £2.43m for health and wellbeing.