Hertfordshire County Council is set to save £500,000 in business rates by transferring its libraries to a charity it set up for the purpose.
It has awarded Libraries for Life the contract for the provision of its 46 libraries in a the five-year contract worth about £10m a year.
The contract was awarded to the new organisation, which will have a councillor as a trustee, following a public tendering process.
Libraries for Life is expected to take over responsibility for the running of library services in December when current library staff and volunteers will transfer to the new organisation.
Cllr Terry Douris, cabinet member for libraries, said: 'We set out on this process last year to try and find an alternative way of delivering our much-loved library service.
'We did so against a backdrop of ongoing financial pressure on council budgets.
'Libraries for Life’s bid was strong and will put us in the best possible position to continue the implementation of our Inspiring libraries strategy in providing high quality innovative library services now and into the future.'