Mr Hammond spoke of a relationship with the EU based on free and frictionless trade and friendship.
He said Britain must invest in its future on the edge of a new technological revolution, as he announced his Budget key points in Parliament today.
The Chancellor plans to invest in skills and infrastructure to support the jobs of the future, he said.
Mr Hammond’s Brexit announcement comes as Theresa May is preparing to up her Brexit divorce offer to the EU to about £40bn.
Mr Hammond said: “We have already invested almost £700m in Brexit preparations and today I am setting aside over the next two years a further £3bn and I stand ready to allocate further funds.”
Brexit Britain will “look forward, not backwards, to meet challenges head on and to seize opportunities for Britain”, he added.
Brexiteers hailed the offer.
Steven Woolfe MEP tweeted: “Gov set to invest £3bn in Brexit preparations, including no deal scenario. The right thing to do #Budget2017”
However, Remainers hit out at the proposal. Green Party leader Caroline Lucas tweeted: “Chancellor throwing money down #Brexit shaped hole when should be investing in the economy & our public services #budget2017”
Patrick Minford of Economists for Free Trade said: “We are pleased that the Chancellor has, for the first time, acknowledged that Britain can thrive because of Brexit.
“However, the general sentiment within the Budget confirms our long-held concern that the Treasury is generally ignorant of and in denial about the wider economic benefits of Brexit.
“This is reflected in the Treasury and OBR’s wrongly, indeed absurdly, depressed forecasts for the economy. The medium to long term economic outlook for post-Brexit Britain is much brighter than the Chancellor has set out today.
“What was missing in the Budget today was detail on how Britain’s economic policy can and must change when we leave the EU to a lighter touch, lower tax, lower spending economic model that offers a clean break from the high regulation, high tax, high spend approach of the EU.
“There is a huge challenge ahead for Britain to build a more competitive economy focused on low business taxation and upskilling the domestic workforce in which higher productivity is a central objective.”
More to follow…