Tata Steel has sold part of its European steel business to Greybull Capital, a private equity company.
Greybull, which specialises in taking on struggling companies, has become the owner of Tata Steel's long products business, including the plants in Scunthorpe and mills on Teesside.
Bimlendra Jha, executive chairman of the Long Products Europe business and chief executive of Tata Steel UK said: "As a responsible seller, Tata Steel is delighted to have secured a buyer for this business and we hope that under Greybull Capital ownership, the business will continue the momentum of the improvement program that has been initiated in the last 12 months.
"Employees and trade unions have worked closely with the Long Products Europe management team to improve the business’s prospects, putting it in a more competitive position than it has been for many years. It is through their dedication and hard work that we are in this position today in spite of continued challenges in the market."
The new company will be called British Steel.
Greybull describes itself as "a family office which makes long-term investments in private companies", indicating that it may not be attempting to merely turn the business round and sell it on.
Talks between Greybull and Tata had been ongoing for nine months, with the two firms entering exclusive talks in December.
The business was purchased for a nominal fee of £1.
British Steel commercial director Peter Hogg said: "Today marks the first day of business for our new company and we are delighted to be launching under the iconic British Steel brand.
"Our industry has faced challenging times over the last few years, but we are confident that our new venture, built on our core values of pride, passion and performance, will not only reinvigorate this business, but position it as a world leader."
The sale means 4,800 jobs in the UK, and 400 in France, have been saved, following a decision by the company to leave the UK market in March after racking up huge losses.
It was expected that the sale would be completed this week after a £400m finance package was put in place with Greybull Capital.
Last week it was reported Tata was considering bids for its loss-making UK business, which have been spurred on with help from the government.