In a move that will give New York commuters more legroom, officials said the Port Authority of New York and New Jersey would spend $1.3 billion on measures to increase PATH train capacity by 20%.

“We are transforming the PATH system from the oldest rail system in the country into the newest,” the Port Authority’s chairman, Anthony Coscia, said.

In addition, the MTA announced yesterday it will expand service on the L and no. 7 lines to handle recent surges in passengers.

At the heart of the Port Authority’s plan is the replacement of the PATH’s entire 340-car fleet at a cost of $809 million. The first new cars will be in use next year, and the goal is to gradually phase out the old ones by 2011.

In addition to the new cars, the Port Authority will install a new signal system to be completed in 2014 that will replace the 38-year-old system at a cost of $500 million. Port Authority officials said the change would allow cars to run more efficiently by letting trains move closer together. Executive director Anthony Shorris said expanding PATH service would potentially take some 2,700 vehicles off the area’s roadways, which would reduce traffic and help curb carbon dioxide emissions.

A spokesman for Mayor Bloomberg, John Gallagher, suggested the proposal could complement the mayor’s congestion pricing proposal. “Bringing more commuters into Manhattan from New Jersey by train is certainly in keeping with the goals of our plan,” Mr. Gallagher said.

PATH trains carry some 227,000 passengers on the average weekday, including 50,000 an hour during the morning and evening rushes.

New York’s subway system gets more use, averaging more than 4 million daily riders. According to the MTA, the number of riders has increased dramatically on the two subway routes for which it is planning to increase service — 48% on the L and 26% on the no. 7 — since 1998.

“The historic growth on these lines illustrates their vital importance to the communities they serve, especially because they serve areas with little or no other mass transit options,” the MTA’s executive director and CEO, Elliot Sander, said.

The MTA will shorten the time between trips, adding 23 roundtrips each weekday on the L train, 30 on Saturday, and another 34 on Sunday. The MTA said this is the largest service increase to a single line in recent years. The no. 7 train will add 10 round trips each weekday.

The changes in schedule will cost $2.6 million a year and will take effect in December.