Transport Secretary Patrick McLoughlin announced the temporary deal, which will see Virgin carry on with the London to Scotland route until November 9, 2014.
After this time the West Coast Main Line will be let under a long-term franchise.
Virgin Rail will run the West Coast Main Line for a further 23 months, the Government announced.
The immediate future of a main London to Scotland rail route - thrown into doubt following a botched franchise process - is likely to become clearer later today.
The Government is expected to announce that Sir Richard Branson's train company, Virgin Rail, can for a time carry on running trains on the West Coast Main Line.
It is believed Transport Secretary Patrick McLoughlin could also publish the independent report he commissioned when he was forced to scrap the West Coast franchise bidding process.
Rail operator Virgin has been asked to continue running the West Coast mainline for another few months after a Government U-turn.Read the full story ›
Transport Secretary Patrick McLoughlin MP told the House of Commons that Virgin will continue to run the West Coast Main Line for the next nine to thirteen months. He said passengers would "see no impact" of the mistakes made by the Government.
"I am committed to ensuring passengers see no impact as the result of these mistakes. [...] Clearly we need to learn the lessons from the two reviews and will need to run a new competition for the West Coast franchise"
InterCity West Coast passengers face the prospect of three different operators in three years thanks to the Government's franchise fiasco.
To provide long term stability for passengers & staff, Govt's not for private profit rail company should have taken over the ICWC service.
Transport Secretary is mishandling this rail crisis. He must rethink his decision to ask DfT Board members to run the 'independent' inquiry.
Our customers have made clear they want us to continue our excellent service and we now have the chance to deliver that and offer customers some short-term continuity.
We will now be working hard to make sure we continue to provide the service that has made us successful. We are grateful for the fantastic support from customers and staff over recent months.
FirstGroup, which had originally won the bidding for the West Coast Main Line before the Government's U-turn, has issued a statement after Virgin was offered an extension as the line's operator while the bidding is re-run.
The company makes no reference to Virgin, instead focusing on the future bidding for the line and, in particular, the findings of two independent reviews set up by the Department of Transport after the first West Coast franchise competition was halted.
We believe the private sector provides the most effective and efficient way to deliver passenger rail services in the UK. We await the outcome of the independent investigations into the West Coast franchise competition and the wider rail franchising process, which we hope will provide a greater degree of certainty and confidence not only to future bidders but to employees, stakeholders and the travelling public too.