A £4.5 billion deal to replace the train fleet that operates between London, Edinburgh, Aberdeen and Inverness has been announced following years of delay.
Agility Trains, a consortium led by Hitachi of Japan, will build 596 rail carriages at a new factory in Newton Aycliffe, County Durham, creating 900 jobs.
Agility was announced as preferred bidder for the Intercity Express Programme in early 2009, but after a series of delays it has taken more than three years for the deal to be finalised.
The first trains will enter service on the Greater Western Main Line in 2017 and on the East Coast Main Line by 2018.
Transport Secretary Justine Greening said: "A new train factory is fantastic news for Britain and will be welcomed by everyone who wants to see a thriv- ing UK manufacturing sector."
Agility Trains chief executive Alistair Dormer added: "We are delighted. It is among the biggest contracts ever closed in the UK rail industry."
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