FirstGroup, the FTSE 250 transport operator, has agreed to sell five bus depots and 330 buses to the West Yorkshire Combined Authority (WYCA) for £109 million.
The deal supports the region's switch to bus franchising, a model in which the local authority sets routes, fares and timetables and pays private operators to run the services.
FirstGroup has also won two franchise contracts in Bramley and Huddersfield, which it expects to generate about £40 million in combined annual revenue from May 2027.
The depot sales have already completed and will deliver a post-tax gain of about £30 million in the current financial year.
The company expects cash inflows of about £55 million this year.
The fleet, made up of 251 diesel and 79 electric buses, will transfer in stages as each of WYCA's three franchise tranches goes live in May 2027, January 2028 and October 2028.
Final fleet proceeds will depend on how many contracts FirstGroup wins in the second and third tranches.
Until then, First Bus will keep running its commercial routes from the depots, which it will lease back for a nominal "peppercorn" rent.
About 130 buses will move to other parts of the group once franchising starts, allowing FirstGroup to defer some spending and save about £10 million over two years.
The new contracts run for five years, with an option to extend for two more.
WYCA will keep the revenue risk, meaning FirstGroup is paid to deliver services regardless of passenger numbers.
The company will also electrify its Bradford and Huddersfield depots, with WYCA covering the cost.
Graham Sutherland, chief executive, said the company was delighted to have secured the contracts.
