Services on the East Coast Main Line have been brought back under public control, taking over from the Virgin Trains East Coast (VTEC) franchise.
Trains on the vital route between London and Scotland - which passes through both the North East and North Yorkshire - are now run by the Department for Transport's (DfT) Operator of Last Resort, branded as London North Eastern Railway (LNER).
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The first LNER service departed from Newcastle to London King's Cross at 7.54am on Sunday.
VTEC, a joint venture between Stagecoach (90%) and Virgin (10%), began operating in March 2015.
The firms agreed to pay the Government #3.3 billion to run trains until 2023, but the contract was ended prematurely after they failed to achieve revenue targets.
LNER will operate until a public-private partnership takes responsibility for both trains and track operations in 2020.
All VTEC staff have been transferred to LNER as part of the transition.
Managing director David Horne said:
The switch from VTEC to LNER is costing an estimated #8 million, which includes marketing, rebranding and IT set-up.
VTEC is the third private operator to fail to complete the full length of a contract to run East Coast services.
GNER was stripped of the route in 2007 after its parent company suffered financial difficulties, while National Express withdrew in 2009.
Trains were run by the DfT for six years up to VTEC taking over.