During the Post-War period, immediately after liberation of North Borneo by the 9th Division Australian Imperial Force (AIF), the British North Borneo Company faced the gigantic task of reconstruction and decided to relinquish its ownership of North Borneo to the British Colonial Office. From then on, North Borneo became a Crown Colony until independence on 16th September 1963 when Malaysia was formed.
After Malaysia was formed, the North Borneo Railway assumed the name of the Sabah State Railway Department and several changes were again made to improve passenger and cargo facilities. By 1971, technological advancement in the form of diesel and petrol-powered locomotives replaced the steam engines. The railway celebrated its centennial anniversary in 1996 as the oldest form of transportation in the state.
On 22 January 2000, the North Borneo Railway was relaunched as a joint venture project between Sutera Harbour Resort and the Sabah State Railway Department, signifying a historical collaboration through common initiatives between the private sector and the state government.