Havant Borough Council is setting up a joint venture to deliver environmental and operational services in the borough.
The 10-year contract with Norse will see 118 council workers transferred to the new company and is expected to save more than £2.5m over the next five years.
Norse South East - the name of the new company - will also bid for more work in the area to help generate extra jobs and income.
Cllr Tony Briggs, cabinet lead for environment and neighbourhood quality at Havant Borough Council said: ‘This is a joint company that will see the wide range of duties carried out by our operational services teams continue, with the same employees, but the systems behind the work will be more streamlined and cost effective.
‘The new company will also have the freedom to bid for extra work, such as commercial waste collections, grounds maintenance, catering, cleaning, vehicle maintenance including Mots and facilities management, as it has the expertise and equipment to do so. There will be a lot of opportunities opened up as a result of this venture.’