Deal involves construction of the Surrey Quays to Clapham Junction line.
Birse Metro has been awarded a £75m contract by Transport for London to build the final part of the London Overground rail network that will orbit the capital.
Birse, which is Balfour Beatty’s London transport division, will construct the remainder of the Surrey Quays to Clapham Junction link by the end of 2012.
Completion of the line will allow passengers to travel around London without needing to head into the centre. While most of the extension will run along existing National Rail lines, a new stretch of track is required to link services at Surrey Quays with the existing railway at Old Kent Road.
A link between Dalston Junction station and Highbury & Islington stations opened recently, connecting the northern end of the overground network with the Richmond to Stratford line.
Commenting on the contract award Mark Hearne, head of Birse Metro, said:
“Birse Metro is happy to continue working with Transport for London following the recent successful delivery of the extension to Highbury & Islington.
“With the support of Balfour Beatty Rail and working in close partnership with Transport for London we will help to deliver the project within the tight time-scales and budget to improve this key transport link for those living and working within this area of south London.”
London mayor Boris Johnson, added: “This small but incredibly significant stretch of track will be the final section of a mighty wheel of overground services around the capital.
“The improvements it will bring are precisely why I made a strong case to the government for the extra funding needed to make this project a reality.”