Train services run by TransPennine Express (TPE) will be brought under Government control due to "continuous cancellations", Transport Secretary Mark Harper said.
The Cabinet minister has decided not to extend or renew TPE's contract, bringing services in to the Department for Transport's Operator of Last Resort (OLR) from May 28.
TPE operates a number of services from Newcastle, transporting passengers to and from the city from locations along the North TransPennine Route including, York, Huddersfield, Liverpool and Edinburgh.
TPE passengers have suffered from widespread delays and cancellations over the past year, with latest figures showing that TPE cancelled the equivalent of one in six services across most of March.
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The FirstGroup-owned operator, which covers an area across northern England and into Scotland, has been badly affected by drivers who are members of the Aslef union no longer volunteering to work paid overtime shifts.
The OLR already runs London North Eastern Railway, Northern and Southeastern services. But Transport Secretary Mark Harper warned that the decision to bring services into the OLR is "not a silver bullet".
He said: “In my time as Transport Secretary, I have been clear that passenger experience must always come first.
“After months of commuters and northern businesses bearing the brunt of continuous cancellations, I've made the decision to bring TransPennine Express into Operator of Last Resort.
"This is not a silver bullet and will not instantaneously fix a number of challenges being faced, including Aslef’s actions which are preventing TransPennine Express from being able to run a full service."
He added that the DfT has "played our part but Aslef now need to play theirs" by calling off strikes and the ban on rest day working.
The DfT put the operator on a recovery plan in February after meeting local mayors to discuss a way forward.
The department said: "While some improvements have been made over the past few months, it has been decided that to achieve the performance levels passengers deserve, and that the northern economy needs, both the contract and the underlying relationships must be reset."
It added: "The decision to bring TransPennine Express into the control of the Operator of Last Resort is temporary and it is the Government’s full intention that it will return to the private sector."
Lord McLoughlin, Chair of Transport for the North, said: "We welcome the decision announced today by the Secretary of State to bring the contract under Operator of Last Resort (OLR) for TransPennine Express.
"The TfN Board's position on this issue has been clear for some considerable time, that services need to significantly improve. While we have seen some improvements over recent months, to achieve the performance levels passengers expect and deserve, and that the northern economy needs, there is a need for a resetting of the operation.
"We will now look forward positively to discussing with our members and working with the government to ensure the best way to achieve a service that meets the expectations of those living and working in the north."
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