The new system on the Great Western Main Line will replace 40 to 50-year-old equipment with the latest technology.
The works form part of Network Rail's project to electrify the line in preparation for a new fleet of 'green' electric trains.
It is understood 250 employees will be working along 20 miles of railway over 23-24 January to begin testing the new system.
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This is in preparation for control of the railway to move from the signal box at Swindon to the modern Thames Valley signalling centre in Didcot later this year.
Paddy Gregg, Network Rail's signalling project director, said: "This project is a vital part of our programme to re-signal the whole of the Great Western route, providing passengers with smoother journeys and fewer delays.
"The first two stages of installing the new equipment went well, with all work completed on time. We are now entering the vital, more technical stages of testing the new signalling system.
"Our work to increase reliability, together with the ability of the new electric trains to reduce journey times and accommodate more passengers, will also help to drive economic growth across the Thames Valley, west and south west England."
The final stage of the Swindon re-signalling project is due to take place in February.
(LM/JP)
