The overnight sleeper train between Penzance and London is to continue, the operator of the new Greater Western rail franchise has announced.
Businesses said the sleeper was economically vital to the region
FirstGroup also said it was increasing the number of through services operating between London and Cornwall.
Nine trains will go run daily, compared with the current seven.
The service had been under threat because it was running at a loss and needed a Department of Transport (DfT) subsidy of £5m every year.
The DfT announced on Tuesday morning that FirstGroup was to run the new franchise from April 2006.
The sleeper announcement comes after MPs and businesses in Devon and Cornwall campaigned for it to be retained saying it was economically vital to maintain a daily rail link between the counties and the capital.
The company said: "We are delighted that the sleeper service between Paddington and Penzance is safe-guarded.
"This shows a tangible commitment to the regional economy in the west of England."
The company said it would invest £200m in services serving Paddington and the West Country, and that it was to invest in refurbishment works at stations including Plymouth, Tiverton and Exeter St David's.
It is also planning revisions of main line timetables in Cornwall to provide a better spread of services in addition to a revision of times on Looe, Falmouth and Newquay branch lines to create better connections with trains on the main line.
The company is also to put on an additional morning service from Torbay to London, returning in the evening, and an additional early morning service between Exeter and Cardiff.
The group also promises it will improve customer information systems, install more CCTV cameras, create more parking spacers for passengers and introduce automatic ticket gates.
It added that timetables would be reviewed on an annual basis.
The South West Public Transport Users' Forum (SWPTUF) welcomed the new of the FirstGroup getting the Greater Western franchise.
SWPTUF said the announcement should remove the last obstacle to getting much needed new investment in to the region's railway network.
Forum Chairman Chris Irwin said: "Passengers want a railway that is both reliable and affordable. FirstGroup has the muscle to ensure the first."
But he added: "We need reassuring that it still has the will to deliver affordable fares."