Prime Minister Manuel Valls hit back at right-wing MPs who said the deal was "tinkering" in parliament on Tuesday afternoon.
"Without state intervention in fact, Alstom would not today have had the chance not only to announce that it was developing the Belfort site but also to say more generally that it can see the site's future differently," he said.
The government will buy 15 TGVs for lines running between Bordeaux and Marseille and Montpellier and Perpignan for 450 million euros.
The state rail company SNCF has ordered six TGVs for the Paris-Turin-Milan high-speed line and 20 diesel locomotives for repair work.
The commissions will also provide work for Alstom factories in La Rochelle, Ornans and Le Creusot.
Alstom committed itself to investing 40 million euros in the Belfort site, dropping a threat to stop train production there and move it to a factory 200 kilometres away in Alsace.
The news was greeted with cheers at a union rally in Belfort and unions welcomed it, while promising to remain vigilant about the plant's future.
Alstom and the SNCF are to plan a fifth generation of TGVs before the end of 2017, with state energy and environment body Ademe investing 30 million euros in the project over two years.