These improvements will bring regeneration to the area
The existing Shepherd's Bush (Hammersmith & City) station will be renamed Shepherd's Bush Market at the same time.
This will eliminate confusion with the nearby Shepherd's Bush station on the Central line.
Wood Lane station, which is the first new station on an existing and unextended Tube line for over 70 years, will be located between Shepherd's Bush Market and Latimer Road stations.
The Mayor of London, Ken Livingstone, said: "The naming of the new Wood Lane station and the renaming of Shepherd's Bush (Hammersmith & City), now Shepherd's Bush Market station, is the latest step in the massive improvement of transport links for West London.
"These improvements will bring regeneration to the area and give this part of the Capital a world-class service for the first time."
LU Managing Director Tim O'Toole said: "The new Wood Lane station on the Hammersmith & City line is a very welcome addition to the Underground network.
"The station will play an important role in getting people to and from the new Westfield London development, the major new retail development in the area.
"The other major benefit is that passengers will be able to travel straight to the White City area on the Hammersmith & City line instead of having to change to the Central line."
The new station forms part of a major new transport hub at White City to support the new retail and leisure development.
The scheme is a partnership between LU and developer Westfield, which is contributing £170m in transport improvements.
In addition to the new Hammersmith & City line station, further transport investments included a re-modelled Shepherd's Bush (Central line) station; a new station on the forthcoming London Overground network which Transport for London (TfL) will launch in late 2007; a new bus station to the north of the White City development; and a new southern transport interchange that will connect LU, bus, TfL London Overground and taxi services.
It will also make provision for the proposed West London tram scheme.
The existing Shepherd's Bush (Central line) station super-structure will be demolished and replaced with an expanded building.
Passenger numbers using the station are expected to rise from 27,000 a day in 2001 to 45,000 a day when the retail centre opens.
Additional staircases and passageways will be provided to cater for this increase, along with step-free access facilities throughout.
The works will see the station almost double in size.