The Metroshuttle around the town centre will continue until the end of 2011 following a pilot scheme that has been running since October 2008.
The service is jointly funded by Bolton Council and the Greater Manchester Integrated Transport Authority. The service operates on a 10 minute circular route around the town centre with a total of 12 stops, connecting the railway station via Newport Street with the bus station via Black Horse Street. The route was revised to include an additional stop near Sainsbury's on Crook Street, last March.
Local company Maytree Travel has taken over the running of the service after successfully tendering for the contract.
Gary Hawthorne, Managing Director of Maytree Travel, said: "We're a local operator and I'm really pleased that we secured this contract to provide a service which will help local people. We can hopefully build up the service with our own network as all of our 20 bus services will advertise the free shuttle."