The government of the Australian state of Tasmania has finalised an $A32m ($27.4m) deal to take back control of the rail freight network from Pacific National Tasmania (PNT).

The government will resume railway operations from 1 December following approval from the state parliament.

The 726km railway network will be maintained, managed and owned by a new state-owned rail company.

Australian firm Asciano subsidiary Pacific National acquired the rail network in 2004 but in 2008 it threatened to close its lines following its inability to turn profits.

The state Minister for Infrastructure Graeme Sturges has reassured PNT employees that they will be offered jobs with the new company on equivalent terms and conditions.