The Class 800 electric trains will increase capacity by about 19%, improve reliability and shave 15 minutes off the journey times between Edinburgh Waverley and London King's Cross.
The average age of the current East Coast fleet is 27 years, compared to nine years for the average Virgin train running on the rival West Coast Main Line from Glasgow to London. The deal, part of the Department for Transport's £5.7bn Intercity Express Programme, will see the brand new trains manufactured at Japanese firm Hitachi's purpose-built factory in County Durham, generating 730 jobs for the area.
The rollout of the new stock had been in the pipeline but an agreement on the final price for the order was not struck until yesterday.
It was the result of negotiations between the DfT and Agility Trains, consortium of Hitachi, John Laing, and Barclays Private Equity.
Transport Secretary Patrick McLoughlin said: "We are building a world class rail system and the Intercity Express Programme is a key part of that. These new trains will transform rail travel between many of the great towns and cities of England and Scotland.
"This deal is further proof that our long-term economic plans are on track, creating jobs and breathing new life into the UK's train-building industry."
The 65 new trains are made up of a mixture of five-carriage and nine-carriages models, adding a total of 497 new carriages to the route.
The stock will include electric trains with classification of Class 801 and Class 800 bi-mode trains, which are equipped with additional under-floor diesel generators to provide propulsion where lines are not electrified.
The fleet will offer increased capacity compared to the current trains, more comfort for passengers and higher reliability. Stephen Joseph, chief executive of the Campaign for Better Transport, said: "Passengers will be pleased to see the East Coast Main Line trains finally getting an upgrade, but many will feel the move is overdue. The average ECML train will be over 30 years old by the time they come out of service in 2018. That the new trains will be built in County Durham is also good news."