First Trenitalia will operate train services on the West Coast Main Line from December 8, the Department for Transport has said.
The joint partnership was awarded the West Coast Partnership (WCP) contract, which also includes responsibility for running the first HS2 trains from 2026.
But the DfT said the Government will “shortly launch a review” into the new high-speed railway, which was widely expected after Boris Johnson became Prime Minister.
It added that the WCP has been designed to ensure it can “implement the review’s outcomes”.
First Trenitalia is a joint venture between Aberdeen-based FirstGroup and Italian-owned train operator Trenitalia, with the former owning 70% of the partnership.
The decision to award it the WCP means another franchise will switch from being wholly controlled by British companies to a part foreign state-run operation.
Trenitalia currently runs trains on the c2c line between east London and Shoeburyness in Essex.
Virgin Trains, a partnership between Virgin Group and Stagecoach, has run services on the West Coast line since March 1997.
The companies are suing the DfT over its decision to disqualify their WCP bid due to a row over pensions.
Virgin Group boss Sir Richard Branson wrote in a blog that he was “devastated”.
Under the terms of the new agreement, First Trenitalia will operate 263 additional weekly services every week from December 2022.
Motherwell, North Lanarkshire, will become a “major calling point”, while destinations such as Llandudno in North Wales and Gobowen in Shropshire will be served by direct trains to and from London. Walsall will receive its first direct intercity services.
The number of direct services between London and Liverpool will be doubled to two per hour, subject to approval from the Office of Rail and Road.
Twenty-three new trains will be used for the extra services to the North West, while the existing Pendolino fleet will be given a £117 million refurbishment, including new seats, additional luggage space and improved toilet facilities.
The department described the WCP as a “significant move away from the previous flawed franchising system”.
FirstGroup chief executive Matthew Gregory said the contract offers a “more appropriate balance of risks and rewards for us as operators” compared with traditional franchises.
He added that, under the first phase of the deal from December 2019 to March 2026, the firm will earn returns on “significant investments in services and facilities” but this will be protected by a “much improved revenue risk-sharing mechanism”.
First Trenitalia’s premium payments to the Government have been set at £1.6 billion during this period.
In March 2026 this will transition into a management contract with responsibility for integrating HS2 and mainline services, with revenue and cost risk passing to the DfT.
Transport Secretary Grant Shapps said the award of the contract is supported by Keith Williams, who is leading a Government-commissioned review into the railway.
“This award is positive news for passengers, with more services, more direct connections and ambitious plans for a cleaner, greener railway, and also represents a decisive shift towards a new model for rail,” he said.
“It is a partnership supported by Keith Williams, built with the flexibility to respond to his recommendations and deliver fundamental reform to a flawed system.”
Shadow transport secretary Andy McDonald claimed giving the contract to FirstGroup is a “gross error of judgment” following the DfT’s decision last week to scrap the South Eastern franchise competition after admitting it would not deliver enough benefits for taxpayers or passengers.