Keolis/Amey was awarded the 15-year contract ahead of Hong Kong-based MTR, which had Bam Nutall on board as its civil engineering partner.
There were originally four bidders, but German-owned Arriva Trains Wales, which is operator of the current Wales & Borders franchise, withdrew last year. It was partnered with Costain.
The other bidder Dutch transport giant Abellio, partnered with Carillion and Aecom, exited the process having submitted its final bid just before Christmas.
KeolisAmey will run the rail franchise from October and design and build the next phase of the south east Wales Metro project with electrification of the core Valley Lines.
Alistair Gordon, Chief Executive of Keolis UK said: “This will be a transformative new rail service for Wales and its borders which will see Keolis once more combine its worldwide expertise in passenger operations with Amey’s engineering excellence.
“We look forward to the successful completion of the procurement process – this exciting contract will deliver for all of Wales. The procurement process was rigorous, resulting in transformative solutions for the benefit of all in Wales, and indeed, future generations.
“While the proposed changes won’t happen overnight, the railway will be unrecognisable in five years thanks to the vision of the Welsh Government.”