Bus operator First Group is to sell its operations in Midlothian and the Borders saying the new railway has made services "increasingly unsustainable".
The deal in principle is expected to be concluded on 25 March.
It would see its Galashiels depot, Peebles, Hawick and Kelso outstations and all staff transfer to West Coast Motors.
First Scotland East managing director Paul McGowan said they would fully support the workers affected.
"Despite the focus on services and the hard work of everyone across our business, unfortunately the introduction of the Borders Railway in 2015 has impacted demand for bus travel and our services are becoming increasingly unsustainable," he said.
"I'm pleased we have an agreement in principle to sell the operations to West Coast Motors, a reliable and well-established transport company.
"I'm confident their experience operating in rural areas will be of great benefit to the business."
West Coast Motors runs a network of bus and tour operations across Scotland and the north of England, including Perryman's Buses in the Borders.
"The proposed sale does not, in any way, reflect the commitment of our employees in the area who have worked tirelessly to provide the best possible service to local communities," added Mr McGowan.
"I'd like to thank them for their hard work and loyalty over the years.
"We will be fully supporting them throughout this process."
He thanked passengers for using their services and said they would "continue to run services as normal" throughout the proposed deal.
A spokesperson for West Coast Motors said it would be inappropriate to comment while talks on the deal were ongoing.
Ettrick, Roxburgh and Berwickshire MSP John Lamont said the announcement was "hugely concerning news, which puts the whole transport system in the Borders at risk".
He said the impact on jobs and existing routes was "unclear".
"While I understand there will be no immediate changes, it will be open to the new operator to reduce services after a relatively short time," he said.
"This would be a huge blow to many people who rely on bus routes."
Fellow MSP Christine Grahame who represents Midlothian South, Tweeddale and Lauderdale said she was seeking urgent talks with the new owners.
"The absolute priority must be maintaining continuity of service for all the communities First currently serves and the 113 local jobs it provides," she said.
"I will be monitoring this situation very carefully indeed as it develops."