Virgin has won its campaign to operate the West Coast Main Line train services through Stafford - with a pledge to raise capacity on the line.
The contract has been awarded for a further two years and nine months and government ministers said the new deal would mean a £35 million investment in improvements, including an additional 5,500 standard-class seats each day on the route between London and Scotland.
Virgin will also invest more than £20 million on modernising stations and improving passenger facilities. Free wi-fi will be available at stations.
Virgin is converting 21 first-class carriages to standard class to improve carrying capacity, and is also spending £2.5 million on refurbishing the interiors of its Pendolino trains and £2.75 m illion on improving catering facilities. The train operator, which has run the franchise since 1997, is paying the government £430 million underthe latest deal.
Transport Secretary Patrick McLoughlin said: "This deal will provide thousands more seats and better journeys for the tens of thousands of passengers who use these services every day. "The West Coast provides a vital artery between London and Scotland and it is crucial we do everything we can to improve services on this much-used route."
The new franchise deal comes two years after Virgin launched a legal challenge to the government's decision to award a 13-year franchise to First Group. The department for Transport eventually scrapped the First franchise, due to "significant technical flaws" in the bidding process.
Virgin Trains executive co-chairman Patrick McCall commented: "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.
"This deal is great news for passengers and taxpayers, with significant benefits for our customers, as well as a big increase in the money we pay to government."