A rail franchise contract was signed on Wednesday, giving Inter City Railways, a joint Stagecoach and Virgin venture, the rights to run the East Coast main line.
According to the Department for Transport, the eight-year deal will give passengers between London and Edinburgh more seats, more services and new trains from March next year.
Under the franchise agreement, Inter City Railways will increase station calls to London by 75 per day from more destinations, 12,200 additional seats across the fleet with 3,100 of those during the peak morning period into and out of London Kings Cross, the introduction of 500 new carriages and a reduction in journey times from London to Leeds by 14 minutes and from London to Edinburgh by 13 minutes.
In addition, £140 million will be spent on improving trains and stations.
Transport Secretary Patrick McLoughlin said: “This is a fantastic deal which will give passengers on this vital route more seats, more services and new trains, and give British taxpayers outstanding value for money.
“With the signing of the contract, Stagecoach and Virgin are firmly on track to deliver these improvements. The new services have only been made possible by the Government’s investment in the railways, a vital part of our long-term economic plan.”
Inter City Railways will pay the Government around £3.3 billion to operate the franchise.
Martin Griffiths, chief executive of Stagecoach Group, which owns 90 per cent of Inter City Railways, said: “This is a hugely exciting time for the passengers, businesses and communities who benefit from rail services on the East Coast route.
“In the coming months, we will be working closely with employees and the management team to ensure a smooth transition to the new franchise.”
The operator has plans to develop its own website, smartphone and tablet apps to allow customers to better plan journeys and buy tickets.