Hays Travel will buy all of Thomas Cook's British travel agent shops, potentially saving up to 2,500 jobs and providing a rare boost for high streets across the UK.
Thomas Cook, the world's oldest travel company whose shops have been a feature of UK town centres for generations, collapsed last month.
Tens of thousands of passengers were stranded as its UK business went into liquidation.
Hays Travel will buy all 555 stores as part of a deal brokered by insolvency advisers KPMG, and the privately-owned travel firm will look to re-employ former employees from Thomas Cook's retail operations.
It also rejected the notion that high street travel agents are dying.
"We're a successful business and because we're independent and offer all tour operators, then we are optimistic that we will trade well in all of the shops," founder John Hays told reporters after the deal.
Thomas Cook collapsed after it became unable to service its debts.
It also failed to convince banks to back a rescue plan in the face of changing customer habits and intense competition from low-cost airlines and internet companies.
It had created the largest chain of travel agents in Britain when it merged its retail operations with those of the Co-operative Group and the Midlands Co-operative Society in 2011.
Hays Travel, a family company which is jointly owned and managed by Managing Director John Hays and Chair Irene Hays, will now be taking that network on.
The 40-year-old firm based in Sunderland in reached sales of more than £1 billion in 2018.
Its management said it was optimistic the shops would prosper thanks to the firm's distinctive approach, where employees have free rein to give each branch a distinctive character, often built through social media.
"The death of the high street travel is a question we've been asked for many years, but we feel we do something different to other high street travel agents," John Hays told reporters.
"We live in a digital world. The Web was their enemy (at Thomas Cook), whereas if you ask the Hays Travel member of staff, they would say the Web is their friend, because we interact positively with it," Mr Hays added.
Hays Travel currently operates just 190 of its own branches across the UK, employing 1,900 people.
The company said it had no plans to close any shops, but would evaluate the performance of each store going forward.
Hays Travel did not disclose financial details of the deal, other than saying it had been funded without taking on any debt.
Ryanair boss Michael O'Leary last week said the business models of both tour operators and travel agents were dead as no young people bought holidays from them.
Irene Hays said her company's data showed differently.
"There has been a huge resurgence in package holidays in recent years," she told reporters.
"It's evident, it's in all of our metrics. So the answer is no, we do not agree with Michael O'Leary," she added.
Thomas Cook refund website targeted by fraudsters
Fraudsters are suspected of targeting a website created to refund Thomas Cook customers, the UK's Civil Aviation Authority (CAA) has said.
The aviation regulator said it has taken "urgent action" over the suspicious online activity and will inform the police.
It has added further verification checks to its refund process and pledged to seek prosecutions where there is evidence of deception.
Some of the concern is understood to have risen from a series of low-level claims, which often indicates fraud.
Around 100,000 claims have been made since the website went live on Monday morning.
It was set up to enable people with Atol-protected bookings for Thomas Cook holidays due to begin after the firm collapsed on September 23 to obtain refunds.
This relates to more than 360,000 bookings covering trips set to be taken by 800,000 people.
Atol-protected customers who were already abroad when Thomas Cook failed can also claim for the cost of replacing the parts of their holiday which were financially protected, or out-of-pocket expenses for delayed flights.
The CAA is aiming to pay refunds within 60 days of receiving a valid form and wants to crack down on fraudulent activity to avoid any delay.
Deirdre Hutton, who chairs the organisation, said: "This morning we have taken urgent action in response to what we believe is attempted fraudulent activity in relation to refunds for Thomas Cook customers".
"If you have made a claim directly with us, then your claim is being processed and you do not need to take any action," she said.
"Please help us to combat the risk of fraud by not submitting your details to any other website. Our focus is on getting money back to the right people as soon as possible and combating fraud in every way possible," she added.
The CAA was forced to apologise on Monday after its system struggled to cope with "unprecedented demand" in the hours after it launched.
Many people received an error message after entering their details, meaning their claims were not submitted.