Doncaster firm VolkerRail has won a £12m contract to replace seven miles of Supertram rails in Sheffield.
It is the second phase of a replacement scheme after the originals wore out faster than expected.
VolkerRail was selected after a tendering process. It also won the contract for the first phase of the scheme which finished in 2015.
British Steel, which provided the rails in the first phase of the project, has again been appointed as supplier in a separate £1 million contract.
SYPTE bosses say works are due to start in 2018 and will take place in stages over the next three years, mainly between May and September, until 2020. This year, the works will be focused on a section between Middlewood and Hillsborough and in the Gleadless – Birley area.
A spokesperson for Stagecoach Supertram which operates the service said: “Some of our customers will be inconvenienced.”