The deal which will see almost 500 new carriages built to run on the main line connecting Yorkshire to London and Edinburgh has been completed.
The Government has confirmed Hitachi Rail Europe will build the carriages at a purpose-built factory in County Durham after signing a £2.7bn contract known as the Intercity Express Programme (IEP).
The new trains are due to start running on the East Coast Main Line in 2018.
As part of the deal, Hitachi will also construct maintenance depots at sites including Doncaster.
Transport Secretary Patrick McLoughlin said: “We are building a world-class rail system and the IEP 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 contract will lead to the creation of 730 jobs at the new factory in Newton Aycliffe.
Campaign for Better Transport chief executive Stephen Joseph said: “Passengers will be pleased to see the East Coast line trains finally getting an upgrade, but many will feel the move is overdue.
“The average East Coast 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. Both passengers and UK engineering are crying out for a long-term Government strategy for rolling stock across the whole network.”