The Minister for Public Enterprise, Ms O'Rourke, has confirmed that the French firm Connex has been chosen to operate the Luas light-rail system in Dublin.
Connex, which operates transport services throughout Europe and Australia, was deemed to have put forward the most economically advantageous proposal after an international competition for the contract.
The five-year contract - with a further five-year option - will apply to operations on the Tallaght to Connolly Station and Sandyford to St Stephen's Green lines.
Services on the Tallaght line are scheduled to begin before the end of next year.
The contract will give Connex a fee for operating the Luas as well as incentives to maximise passenger numbers.
There is provision for financial deductions from the amount paid to the company if there is under-performance.
Ms O'Rourke said yesterday that the trams would be running on Dublin's streets next year.
"Work on the laying of the track has progressed very well and just after Easter the first test runs of Luas on track will happen," the Minister said.
A spokesman for the Minister said the new system was expected to carry some 20 million passengers per year.
Connex will now be responsible for the introduction of the largest single public transport service since the DART initiative in the 1980s.
It beat rival bids from two other short-listed firms: a French operator, TransDev, and British firm First Group.
CIÉ was eliminated at an early stage in the bid process.
Connex is a wholly owned subsidiary of the French company, Vivendi Environment SA. CGEA Connex is a leading railway and bus operator in Europe, although the systems it operates have a mixed reputation.
It runs light-rail systems in Bordeaux, Rouen, Barcelona, Stockholm and Sydney, and commuter rail networks in Melbourne and London.
Connex will be responsible for the operation and maintenance of Luas rolling stock and the management of two Luas depots. Delivery of trams began last year when the Government was accused of exploiting the arrival of the rolling stock for political purposes.
The first depot, at the Red Cow in west Dublin, is almost complete.
Luas is expected to carry 16,500 passengers an hour at peak times.
Ticket tariffs will be set by the newly established Rail Procurement Agency, which is chaired by Mr Padraic White, a former managing director of IDA Ireland.
It is anticipated that an integrated ticketing system, long delayed on CIÉ's services, will be also introduced.
This will enable passengers to use the same tickets on buses, trains and on Luas.