The 25-year deal will see Vinci Ringway give a massive makeover to the borough’s 259 miles of road and 458 miles of pavements.
A business case will be now submitted to the Department for Transport for approval in April.
Once this is approved in the summer, the contract will be signed and preparations will begin in July to start work in January 2013.
The first five years of the contract will see Vinci Ringway make an initial investment of £100m to upgrade the road network.
This will then be maintained to the improved standard for the rest of the contract.
The deal will include upgrading and improving roads, pavements, street lights, street cleaning, signs, street furniture such as benches and bollards, as well as drains and gutters across the borough.
As part of the arrangement, 200 London Borough of Hounslow staff will transfer across to Vinci Ringway through TUPE arrangements to the preferred provider.
Cllr Corinna Smart, cabinet member for environment at the council said: “I am delighted that we have reached the significant milestone of announcing our preferred bidder.
“This contract will literally change the face of the London Borough of Hounslow. It will be a massive boost for residents, businesses and visitors.
“We know our roads and pavements are in poor condition, and to get them up to the standard we want would cost more money than we could ever afford. This PFI provides an affordable way of tackling the problem and getting shot of the grot.”
Phil Jackson, the bid director from Vinci Concessions, said: “We are absolutely delighted to have been chosen to work with the London Borough of Hounslow on this pathfinder Highways Maintenance project.
“We have developed a strong partnership working relationship with our colleagues from the client team during the bidding process and are confident that together we can provide a world class highway service in Hounslow.”
Ringway group managing director Scott Wardrop said: “Ringway is a company that was ‘born’ in London in 1976 and we have been providing high quality highway surfacing and related services to the residents of Hounslow for the last 20 years.
“We are delighted that we will be able to continue that relationship for another 25 years through this Highway PFI project that helps regenerate the streetscene of the borough.”