Balfour Beatty is to carry out the 64km stretch of electrification between Cardiff and Bristol Parkway of the Great Western Railway.
The contract for the work was awarded after a four month early contractor involvement (ECI) phase with Network Rail to agree the scope, programme and cost.
The contractor said it would use the latest technology and innovations in design, construction and rail plant to improve safety and efficiency.
Balfour Beatty managing director for the UK Rail business Mark Bullock said: “Our selection to deliver this important upgrade to the UK rail network builds on our partnership with Network Rail and recognises Balfour Beatty’s capability and expertise.
“Balfour Beatty and Network Rail have successfully delivered the Crossrail West Outer Electrification Programme to schedule and I look forward to passengers seeing the benefits which will come when this new section of electrification is complete.”
Work on site is due to start this month and be completed by December 2018.