A centre of excellence is expected to be established in the North of England to speed up the delivery of full fibre networks.
Plans for the centre were revealed as TalkTalk sold its fibre networks rollout business to Cityfibre for £200 million.
The deal for Fibrenation was supposed to have been completed last year, but was delayed following Labour’s announcement that it planned to nationalise parts of BT if it won the general election.
But it has now been finalised and makes Cityfibre the UK’s third largest digital infrastructure platform behind Virgin and BT.
The agreement will also lead to the creation of a Northern Centre of Excellence and help to deliver the next generation of digital infrastructure throughout the North of England.
The precise location for the centre has still to be confirmed.
A CityFibre spokesman told The Yorkshire Post: “Given the wealth of expertise built up in the region around the York project, CityFibre will be calling upon the huge amount of expertise within the FibreNation team and focusing that on establishing a centre of excellence that will drive forward the roll out of full fibre networks in the North.”
Greg Mesch, chief executive of Goldman Sachs-backed Cityfibre, said: “The UK is a service-based economy, and this runs best on full fibre.
“Ensuring national coverage is critical and this can only be achieved by driving infrastructure competition at scale.
“This deal demonstrates the appetite from industry to see it established.”
The deal comes as a survey by comparison site Cable found that Britain is now in 81st place in the world for the value of home broadband packages due to slow internet speeds compared with other countries.
Fibrenation was founded in 2018, four years after a joint venture between TalkTalk, Sky and Cityfibre was launched to roll out full-fibre broadband across York.
The deal also sees Cityfibre announce that it has changed the terms of its partnership with Vodafone to allow other internet providers to access its networks sooner than planned.
Vodafone aims to bring full-fibre broadband to one million homes and businesses by 2021, with a further four million added by 2025.
Tristia Harrison, chief executive of TalkTalk, commented: “We are pleased to announce today’s agreement with CityFibre, which is good news for TalkTalk, and good news for Britain and its full fibre roll-out ambition.
“Our investment over the last five years and the excellent work delivered by the FibreNation team, combined with CityFibre’s well-established platform, will support wide-geographic reach of full fibre and further drive competition in the market.
“The sale of FibreNation to CityFibre, in combination with a competitive wholesale agreement, enables us to continue our strategy to accelerate TalkTalk’s fibre growth for our residential and business customers, thereby delivering a superior customer experience at an affordable price.”
The deal is subject to approval from TalkTalk’s shareholders.
The Culture Secretary Baroness Morgan also welcomed the deal.
She said: “This is great news for full-fibre rollout.
“We want every corner of the country to benefit from world-class, gigabit-speed broadband and this agreement will help to stimulate competition in the market so that the UK has the infrastructure in place to support businesses and our economy.”
CityFibre recently became a patron of the West & North Yorkshire Chamber of Commerce as it builds its presence in the region.
CityFibre has joined the chamber to engage with local businesses.
Kim Johnston, CityFibre’s city manager for Leeds, said: “Yorkshire is a hugely important region for CityFibre and it’s the perfect time to join the chamber as our Leeds project takes shape.”