Serco NorthLink Ferries will be awarded the next contract to continue operating the Northern Isle Ferry Services (NIFS) network by the end of March.
The £450m contract would be for an initial six-year term, with the option for the Scottish government to extend it for a further two years, valued at an additional £160m.
Serco, which has been running the NorthLink franchise since July 2012, was named the preferred bidder last September. It was up against German firm Förde Reederei Seetouristik, and fellow Scottish operator Caledonian MacBrayne (CalMac).
In October 2019, CalMac said it was challenging the Scottish government's decision not to give it the contract but has withdrawn its legal action.
Minister for Energy, Connectivity and the Islands Paul Wheelhouse said that all issues had been resolved and that 'we can now start to focus on the award of the new contract and the benefits it will bring to the communities that are served by these lifeline ferry services.
'These include customer focused enhancements, such as extra premium cabins, terminal lounge refurbishment at Hatston and extended opening hours for customer services.
'We want to support key sectors of the Northern Isles' economies, such as tourism, fishing, food and drink, aquaculture and farming.'
Mr Wheelhouse said that these improvements and the three-year fares freeze and cabin discounts underline the Scottish Government's commitment to providing high quality ferry links to and from the Northern Isles.