Rail services on routes operated by Northern are to be brought under public control.
The Department for Transport is putting the Government-controlled Operator of Last Resort in charge of running services.
The chaotic introduction of new timetables in May 2018 saw hundreds of Northern trains a day cancelled.
Punctuality and reliability problems continue to blight the network.
German-based Arriva was due to run Northern until March 2025.
In a written statement to Parliament, Transport Secretary Grant Shapps said he wanted "real and tangible" improvements for passengers on Northern's routes.
Northern's owner, German-based firm Arriva, said passengers, employees and suppliers could expect operations to continue during the transfer period to public ownership.
Chris Burchell, Arriva MD UK Trains, said external factors had made the company's plan for the network "undeliverable".