Network Rail will begin construction of the Borders Railway early next year following the completion of a project transfer agreement between Network Rail and the Scottish Government.
The agreement, which was signed at the National Mining Museum Scotland in Newtongrange on Tuesday, follows 11 months of detailed planning and negotiations between the two organisations.
It commits Network Rail to commissioning the new 30 mile railway and seven new stations by summer 2015, costing £294m at 2012 prices.
With Network Rail’s involvement, the total 30 year construction and maintenance cost of the scheme is now £60m less than initial estimates.
Midlothian Council Leader Bob Constable said the transfer to Network Rail heralded a new milestone in the project.
He said: “With the transfer to Network Rail and major work starting in January, local people in Midlothian will soon be able to get a real sense of the impact this project will have on their lives.
“Four new stations at Shawfair, Eskbank, Newtongrange and Gorebridge will take Midlothian residents direct to Edinburgh Waverley.
“The main line rail service will encourage economic growth and inward investment, increase tourism and open up new opportunities for leisure and education.
“And of course, the rail service will offer a real alternative to the car. Personally, I can’t wait to buy my first ticket to use the new line.”
While it remains the clear target to have the railway line in place by the end of 2014, a contractual completion date of summer 2015 has been agreed.