Cheshire East and Cheshire West and Chester councils have decided to take ICT, finance and HR services back in-house.
The councils had set up trading company CoSocius in May 2014 to deliver these services, but said the 'changing nature' of the councils had cuased them to review the agreement.
The decision will affect around 330 staff, who will be transferred to one of the two councils. Cheshire East will now provide ICT services to both councils, will finance and transactional HR services will be provided by Cheshire West and Chester Council.
Cllr Louise Gittins, deputy leader of Cheshire West and Chester Council and committee member, said: 'CoSocius has had a number of notable successes, however, we are constantly reviewing the service to ensure we get best value for money for our council tax payers.
'Staff who transfer to one of the two councils will be protected and services will now be delivered in-house with a shared arrangement to ensure value for money.'