Fourteen new trains are to be built at a Hitachi factory in County Durham, securing hundreds of jobs.
The plan saves 700 jobs with a £500 million investment for the Newton Aycliffe site.
The factory and its workers faced an uncertain future with a looming break in their order book before work began. HS2 (High Speed 2).
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British transport group First Group, leasing company Angel Trains and Hitachi have agreed a deal to order 14 five-car trains which will run in 2027 on the new Carmarthen-London route and the East Coast Mainline service.
They will also provide additional capacity on existing Lumo and Hull train services.
A further investment of £460 million for 13 five-car trains is an option for the factory.
Jim Brewin, chief director of Hitachi Rail in the UK and Ireland, said the contract was “a positive step forward” and “a simple recognition of the hard work and patience of our teams”.
He thanked local MPs and North East Mayor Kim McGuinness, saying they had “worked tirelessly to support this private sector investment”.
Angel Trains added that this was the first such announcement in six years.
During the general election campaign, the Prime Minister Sir Keir Starmer toured the factory and said the workforce was “facing devastating job losses.”
On Friday he said: “I made a promise to the staff at the Newton Aycliffe factory and today I am keeping that promise. »
Earlier this week the Department for Transport announced that South West Rail, c2c and Greater Anglia would become the The first three nationalized railway companies as part of the government’s plans to create Great British Rail.