Inter City Railways, a consortium of Stagecoach and Virgin, beat off competition from Eurostar today to win the East Coast mainline rail franchise.
The Department for Transport claimed rail journeys between London and Edinburgh will be “transformed” with more seats, more services and new trains.
Inter City Railways pledged to invest £140 million to bring extra benefits for passengers over the eight years franchise.
Journey times from London to Leeds are to be trimmed by 14 minutes, and from London to Edinburgh by 13 minutes.
The deal will include 23 new services from London to key destinations, with 75 more station calls a day and plans for new direct links to Huddersfield, Sunderland, Middlesbrough, Dewsbury and Thornaby.
More trains will run to London from Bradford, Edinburgh, Harrogate, Leeds, Lincoln, Newcastle, Shipley, Stirling and York.
Sixty five new trains are to be introduced from 2018 providing 500 new carriages with 3,100 extra seats for the morning peak by 2020.
The existing fleet will be refurbished with better Wi-Fi and catering on new trains.
Transport secretary Patrick McLoughlin said: “This is a fantastic deal for passengers and for staff on this vital route. It gives passengers more seats, more services and new trains.
“We are putting passengers at the heart of the service. I believe Stagecoach and Virgin will not only deliver for customers but also for the British taxpayer.
“This government knows the importance of our railways. That is why they are a vital part of our long term economic plan, with over £38 billion being spent on the network over the next five years.”
Stagecoach Group chief executive Martin Griffiths said: “A passion for customers, employees and the community is at the heart of our plans for the franchise. We want to build on the quality and pride of the people who will be joining our team.
“We have some fantastic ideas to deliver a more personal travel experience for customers.
“Investing in the committed people who will make that happen is a big part of our plans, giving opportunities for them to develop and grow into more senior roles.
“At the same time, we have developed major programmes to help young people, communities and small businesses along what is one of Britain’s major rail routes.”
The new franchise will start in March 2015 and is planned to run until March 2023, with the option for a one-year extension at the DfT’s discretion.
Virgin Group senior partner Patrick McCall said: “Our long term partnership with Stagecoach has seen a revolution in customer service standards, great product innovation, reduced journey times and improved timetables on the West Coast mainline.
“We plan to deliver similar success on the East Coast and are looking forward to working with the team there to build on their achievements.
“Our partnership will concentrate on areas for which Virgin is famous, such as looking after our customers and our people.
“We have a great opportunity to blend the successes of the East Coast and the West Coast lines to create a great experience for all.
“Together with these new ideas and initiatives, passengers will begin to see those Virgin touches on each and every journey.”