Spain and France have agreed to build a high-speed rail line linking Madrid and Paris, allowing passengers to travel between the two capital cities in five and a half–six hours.
The line is expected to begin operations in 2012.
The two governments will form a new yet-unnamed company to run the new line, which will be operated from Spain.
The company will be run by Spanish state rail operator Renfe and French rail operator SNCF, each holding a 50% stake.
Renfe plans to invest €300m (£272m) to buy ten trains to serve the new line, bids for which are expected to be invited next year.
The new line will be connected with the Eurostar station in Paris, allowing passengers to travel on to London without having to cross the city by metro.