The first commuter services on a £320 million rail link connecting Oxford city centre and London will begin on Monday.
Chiltern Railways will operate two trains per hour between Oxford and London Marylebone, with journey times from around 60 minutes.
Rail bosses claim the service will give passengers "real choice and flexibility" as Great Western Railway already runs trains between the cities, using London Paddington.
Franchise competition is rare on Britain's railways. Among the few existing examples are London-Birmingham, London-Gatwick Airport and London-Peterborough.
Annual season tickets between Oxford and London will cost £4,920 from January 2 following the annual price increase.
More than 850,000 journeys are expected to be taken to or from Oxford station on the new Chiltern Railways services each year.
Trains began running on the route on Sunday, with the first weekday services leaving Oxford at 5.36am and London Marylebone at 6.09am, on Monday.
Network Rail contributed £190 million towards the project, with Chiltern investing £130 million.
Transport Secretary Chris Grayling said: "This is the first new rail link between a major British city and the capital in 100 years and also a shining example of partnership working between the private and public sector.
"From today travellers to and from London Marylebone and Oxford will get increased choice, more trains and faster journey times."
Some 1.5 million passengers used the line from London Marylebone in its first year when it opened as far as Oxford Parkway on the outskirts of the city in October 2015.
In September the final track installations were completed for the extension into the city centre, with the old 20-40 mph branch line upgraded to a 100 mph main line.
The railway from Oxford to Bicester was closed in 1967 before being reopened 20 years later.
It was closed again for the modernisation work in February 2014.
Sim Harris, managing editor of newspaper Railnews, told the Press Association that the reopening of the line to Oxford is a "landmark moment" as it is "another small but important" section of East West Rail.
It was announced last week that a new organisation separate to Network Rail will be created to secure private sector investment to design, build and operate the reopening of the line from Oxford to Cambridge, which was closed in the 1960s.
Network Rail chief executive Mark Carne said: "I am delighted that Network Rail has delivered the first part of East West Rail on time and on budget for our customers.
"What's really satisfying is how this happened: Chiltern told us what their customers wanted and put up some money - then Network Rail, working closely with Chiltern, made it happen."
He added that privately-funded railway projects based on customers' needs are "exactly what Network Rail is all about" and called for "many more railway upgrades following this model in future".
Chiltern Railways managing director Dave Penney said: "The new line delivers meaningful benefits for those living and working in the region and will be economically advantageous for the regional economy.
"It creates direct competition in the rail market between Oxford and London giving customers a real choice and flexibility."