I've done the type of swap 2rail to 3 rail you want to do. The first thing you need to do is connect a DC transformer to your rails and see if the loco will navigate your 3 rail track.
If it does, the conversion is relatively straight forward using TMCC from ERR. That being said, you are miles ahead if you convert it to battery powered RC with sound. That is what I'm doing now. It is a much better solution. Even though the 3 rail conversion is straight forward it is difficult to execute with a good chance of shorting your TMCC unit. Maybe it is easier with MTH equipment, I don't know.
Fantastic! I've been looking into RC with a friend. Would I just use an HO scale type sound decoder?
There are sound decoders for O scale to G gauge. The expense all in for the RC system will be $200 to $300 with suitable battery. You'll spend the same to convert.
The neat thing is since the 2 rail drivers are insulated the RC loco can be run jointly with your 3 rail stuff.
Again, first make sure the loco will navigate your 3 rail layout and switches.