First Scotland East is to sell its operations in Midlothian and the Borders saying the new railway has made services “increasingly unsustainable.”
The deal is expected to be concluded on 25 March, with West Coast Motors taking over from that date.
It would see its Galashiels depot, Peebles, Hawick and Kelso outstations and all 113 staff transfer.
First Scotland East MD Paul McGowan (pictured) says: “Despite the focus on services and the hard work of everyone across our business, unfortunately the introduction of the Borders Railway in 2015 has impacted demand for bus travel and our services are becoming increasingly unsustainable.
“I'm pleased we have an agreement in principle to sell the operations to West Coast Motors, a reliable and well-established company.
“I'm confident their experience operating in rural areas will be of great benefit to the business.”
West Coast Motors says it would be inappropriate to comment while talks on the deal are ongoing.