Renown Cavendish will replace Eastbourne Buses' Service Five in Pevensey and Westham after fears of villagers being 'stranded'.
East Sussex County Council became concerned about the withdrawal of Service Five.
As a result, negotiations took place with Renown Cavendish and the company has agreed to extend its route 10.
Renown will now provide an hourly service on Mondays to Fridays for the Pevensey, Pevensey Bay and Westham areas.
Councillor Matthew Lock, lead cabinet member for transport and environment, said, "We need significantly more financial support from central government for a modern transport system.
"However, although we are not in a position to supply further funding, we have negotiated with the bus companies and found a way for the service to continue.
"I am very pleased that residents of Westham, Pevensey and Eastbourne will see the continuation of these services."
Westham resident Marjorie Lambert has campaigned to keep Service Five for a number of years.
She said, "We are so pleased the service will continue to serve the two villages as it has been so well used by the residents.
"Without Service Five, people in Beachlands would have been left stranded.
"The new bus service runs to all the important places, such as the hospital which is a real advantage to the elderly people who faced a costly predicament."
Marjorie, who is also chairman of the Westham and Pevensey Transport Partnership, has contacted MP Greg Barker on a number of occasions.
"I would like to say thank you Greg Barker and Matthew Lock for all the support they have given us," she said.
"We are delighted and this has been a worthwhile venture."
Mr Barker said, "I am absolutely delighted that we have finally found a solution to the Service Five bus.
"Huge numbers of my constituents in Beachlands, Westham and both Pevensey and Pevensey Bay rely on the buses for access to shops, schools and healthcare — the bus is not a luxury, it is a lifeline.
"This is a great victory for our local campaign and I would like to pay tribute to all the local people who have worked to keep a bus service running in the villages."
The good news was discussed at a Westham Parish Council meeting at Stone Cross Amenity Hall last Monday (March 17).
Cllr Michael Nash said, "This seems to be a great solution to the problem and is excellent news for the residents in the area."
And chair of Westham Parish Council, Cllr Barbara Molog, said Matthew Lock's letter brought 'brilliant' news.
Eastbourne Buses service five ends on Easter Sunday and the revised route 10 will run between Beachlands, Pevensey Bay, Pevensey, Westham, Stone Cross, Shinewater, Langney, ASDA, Seaside, Old Town, Hill Road, DGH and Sainsbury's.