Transport for London has revealed a new operator for part of London's suburban railway system.
Transport for London will still control fare and revenues it said.
The North London Railway, currently operated by Silverlink Metro, will be run by Hong Kong firm MTR and construction firm Laing.
They will take over the North London Line in November under the new name London Overground.
It will combine with a revamped East London Line in 2010 to provide improved services ahead of the 2012 Olympics.
"This is the first part of the grand plan to transform the suburban railway network," said a TfL spokesman.
The second phase of the project will involve rebuilding the East London Tube Line in a £1bn upgrade.
The line - which runs from Shoreditch to New Cross - will be closed from December so that work can begin to extend the line north to Highbury and south to West Croydon.
Once tied into services on the London Overground, the new network will serve 20 of the capital's 33 boroughs with high-frequency metro style services.
TfL boast the new network will bring far-reaching improvements including more staff, new trains, a vastly upgraded service, and refurbished and new stations.
While it will retain control over fares and revenue, critics say it smacks of privatisation.
Bob Crow, general secretary of the Rail Maritime and Transport Workers, said: "However it is dressed up, this announcement means that the operations of London Underground are now being dragged down the same failed path of privatisation that has already so disastrously undermined the national railway network."