Glasgow City Council has signed a £265.5m, 10 year deal with IT outsourcing firm Serco.
Scotland's largest local authority says the contract will save it more than £70m over the next decade.
The council has launched a limited liability partnership (LLP) with Serco, in the first joint venture of its kind - between a public body and a private sector firm - in Scotland. Under the LLP, 280 council staff will be seconded or transferred to the new business.
The council has targeted 20 per cent efficiency as a result of the deal - through introducing IT-based services, rationalising property and process improvements.
Ovum analyst Peter Clark said. "Glasgow City Council has a reputation as a reluctant outsourcer. It also has a strong tradition of silo-working, so the JV will not be risk-free."
Council chief executive George Black said: "We will now move towards developing community hubs where staff will deliver the services people want as near as possible to the heart of their local area."
"This deal will reduce the council's office estate in the centre of Glasgow and make better use of their offices in the suburbs," he said. "We will also create new offices to facilitate flexible, mobile working.”
Kevin Lavery, CEO of Serco Solutions, said: "This solution bundles BPO, IT and property together.” He promised to bring “expertise from across the Serco group to deliver a unified service for Glasgow."
Serco has recently won contract renewals at the London councils of Southwark and Ealing, as well as a seven-year, £14m desktop contract with West Sussex County Council.