Which AWS service or component will provide this functionality?

Explanations:

AWS Transit Gateway is used to connect multiple VPCs and on-premises networks, but it does not create isolated networks by itself. It facilitates the routing of traffic between them.

An Internet Gateway allows communication between instances in a VPC and the internet. It does not create isolated networks; it simply provides a path for traffic to and from the internet.

Amazon VPC (Virtual Private Cloud) is the service that allows users to create isolated networks within an AWS account. It enables the setup of multiple VPCs that can be fully configured for security, routing, and IP address management.

Amazon EC2 (Elastic Compute Cloud) is a compute service for running virtual servers. It does not provide network isolation by itself and relies on VPC for networking capabilities.