Cornwall Council will receive up to £1.8 million over two years to run year-round flights between London and Newquay.
Eastern Airways will operate the route, it was confirmed last week. Flybe had previously fulfilled the PSO before it collapsed in February 2020.
The Department for Transport (DfT) on Monday said services would operate from Gatwick under a reinstated PSO, which it said would create "hundreds of jobs" while keeping people connected.
