Go-Ahead Group has beaten off competition from Stagecoach to become the preferred bidder for Plymouth CityBus (PCB).
Completion is subject to final due diligence and full council approval, expected at the end of November.
Owned by Plymouth City Council, it operates 173 buses and 11 coaches from a large freehold depot in the centre of Plymouth , and carries 14 million passengers a year.
Go-Ahead Chief Executive Keith Ludeman says: "We are very pleased to have been selected as the preferred bidder and are now working closely with Plymouth City Council to complete the deal.
"Plymouth CityBus has an excellent reputation and fits well with our strategy of investing in high quality bus companies in urban areas which then maintain a strong local brand and high degree of autonomy to ensure close links to local customers and other stakeholders