The new Wales and the Borders franchise will embrace the two main Welsh franchises, Cardiff Railway and Wales & West, currently run by Prism Rail which is being taken over by National Express.
It will also include the other Wales train services run by First North Western, which operates routes in North Wales, and by Central Trains which runs trains from the Midlands to mid-Wales.
All stations in Wales will be covered by the new franchise, including those currently operated by Great Western and those that will mainly be used by the new network in the border counties, including Chester, Shrewsbury and Hereford.
Services currently provided by FirstGroup's Great Western Trains, Virgin CrossCountry and Virgin West Coast are not included in the new franchise.
'Tough one'
Announcing the new dedicated network in Cardiff, Mike Grant, franchising director and chief executive of the SSRA invited proposals to run the new franchise.
"Instead of four different operators offering a disparate range of services, what we will be seeing is one cohesive network, run by a single, fully focused, coherent operator," said Mr Grant.
"The competition to select that operator is now on in earnest. It will be a tough one, with extra investment and better services our overriding criteria."
Welsh Transport Secretary Sue Essex dubbed the announcement "excellent news for the future of rail travel in Wales".
Extra investment
"The Assembly has consistently stated our belief that a single, cohesive franchise for Wales and the Welsh borders would yield the best results for passengers," she said.
"I am optimistic that today's decision will deliver tangible improvements, in terms of investment and services, to the benefit of the people of Wales."
Clive Williams, Secretary of the Rail Passengers Committee Wales welcomed the move.
"The Committee expects the new train operator to produce the extra investment required to improve and modernise passenger services in Wales."
The franchise-winner is expected to be announced early next year.