A total of 270 carriages will be manufactured in Britain by Hitachi Rail Europe at its new purpose-built factory in Newton Aycliffe, County Durham, as part of the Government's overall £5.8 billion Intercity Express Programme (IEP).
The latest order for the trains, called the class 800 series, will be operational on the East Coast Main Line from 2019 and will deliver significant benefits to passengers. These include boosting capacity by 18%, improving train reliability, and cutting journey times between London, Leeds, Newcastle and Edinburgh by up to 18 minutes.
The order is a boost for Hitachi's north east England manufacturing facility and its 730 planned jobs. It will further enhance the factory's ability to win lucrative rail contracts across Europe and give the UK another runner in the global race to build the world's best trains.
Transport Secretary Patrick McLoughlin said: "By signing this deal we have provided further proof of our determination to transform Britain's railways into a world-class operation through continued investment and state-of-the-art technology."
Last year the Department for Transport agreed an initial order for 596 carriages with Agility Trains, a consortium of Hitachi and John Laing.
As well as building the new state-of-the-art manufacturing facility, Hitachi is also planning to construct maintenance depots in Bristol, Swansea, west London and Doncaster, and will upgrade existing maintenance depots throughout Britain to service the class 800 series trains.
The first batch of class 800 series trains will enter revenue-earning service on the Great Western Main Line in 2017 and on the East Coast Main Line in 2018.
Hitachi Rail Europe's executive chairman and chief executive Alistair Dormer said: "This order is a tremendous boost for Hitachi Rail Europe's new factory with its 730 future employees in County Durham and for the British supply chain. This order extends firm orders at the factory until the end of the decade with significant capacity remaining available for further UK and export contracts actively being pursued."