The Tasmanian Government has completed the takeover of the state's rail network from Asciano.
The $32m deal is for the sale of Asciano subsidiary Pacific National Tasmania-owned Melba Line.
The railway will now be operated by newly formed state-owned company Tasmanian Railway Pty Ltd.
Infrastructure Minister Graeme Sturges said the takeover provides security to the state's 140 rail workers.
"I am certain industry can now look forward with confidence to the future of freight rail in this state," Sturges said.
The deal is an effort by the state government to keep the rail service running after troubled operator Asciano threatened to close its lines.