Virgin Trains has won the contract to continue operating West Coast Main Line services, with a pledge to raise capacity and introduce new routes.
The new West Coast franchise will run until 2017, with an option for a one-year extension.
In 2012 the Government awarded the contract to rail operator First Group, but it was delayed and then cancelled after the Department for Transport (DFT) discovered technical flaws in the way the franchise process was conducted.
The new West Coast contract will provide an extra 5500 standard class seats per day.
This will be made possible by coach G on 21 Virgin trains converted from first to standard class.
Virgin has also announced it will offer 'superfast' free wifi on all 76 Pendolino and Super Voyager trains. Network Rail intends to support this by providing track-side infrastructure.
Virgin claims it will be the first major intercity deployment of 4G technology on the UK rail network.
There will be new direct services between Shrewsbury, Blackpool and London from December.
Virgin will also invest more than £20 million to modernise stations, improve waiting rooms, seats and shelters.
Financial benefits
The contract means the DFT will receive a guaranteed payment of more than £430 million over the length of the contract, as well as up to 100 per cent of the additional returns generated by Virgin Trains.
The fixed premium represents an increase of at least 58 per cent per year, and the DFT said this will help "support the huge investment that is taking place in the railways".
Patrick McCall, Virgin Trains executive co-chairman, said: “We’re delighted to have reached a deal after some tough negotiations with the DFT.
"It puts the problems of 2012 firmly behind us, and shows the clear benefits of a well-run franchise system."
The new West Coast contract comes into force on June 22.