Supervision of all offenders in England and Wales is being brought back under public control, justice secretary David Gauke has announced.
From December 2020, the National Probation Service will take over the management of low and medium-risk cases, which are currently handled by private providers.
The move will reverse changes made in 2014 by former justice secretary Chris Grayling.
Problems with the part-privatisation of probation services has so far cost the taxpayer almost £500m, The National Audit Office said.
Speaking to talkRADIO, Mr Gauke said lessons had been "learned from the experience" of part-privatisation.
"Some aspects worked better than others. We will build on the successful bits, but if we need to make changes then with the benefit of that experience, we should do so," he said.
"They were old, ambitious reforms."
Despite renationalisating probation services, Mr Gauke added that the private sector companies had done "some good stuff".
He added: "The private sector companies are doing some good stuff when it comes to unpaid work, but when it comes to offender management - which is essentially the supervision of offenders - that has not worked as well as we had hoped."