AVON and Somerset Police Authority has joined Somerset County Council and Taunton Deane Council in the new IBM joint venture admin company, Southwest One.
In a deal worth up to £185million over 10 years and the police authority says it provide current services at reduced cost.
The 600 staff involved include such functions as financial services, human resources, information technology, estates, facilities management and procurement as well as enquiry offices.
The deal was sealed on Thursday following 12 months' work with IBM and the two local authorities.
The pioneering joint venture company was launched in October last year.
The Police Authority says its aim in joining is to improve the services provided by the constabulary and secure police staff jobs - but not everyone is happy about the deal - click here for more details
Colin Port, chief constable of Avon and Somerset Police, said: "This is a great opportunity for us to change, improve and transform policing.
"Without the support of our police staff, police officers would simply be unable to perform the duties they do.
"It is imperative that we deliver services that represent value for money for council tax-payers locally and this joint venture gives us the chance to re-invest in frontline policing and secure the employment of our dedicated police staff.
"I would like to congratulate the police authority for their willingness to seize the initiative and look at alternative ways to improve the services that we provide."
Dr Moira Hamlin, chair of the Avon and Somerset Police Authority, said: "This is far reaching and significant decision as it is the first time any UK police service has joined such a strategic venture.
"We are taking this innovative step as we believe it can deliver demonstrable benefits and improvements in police services for local people.
"Police authorities up and down the country are faced with the dilemma of improving police support services in the face of budget shortfalls.
"This Police authority has vowed to explore wider options and drive out efficiencies without losing valued employees."
Richard Jones, chief executive of Southwest One, said: "I am delighted to welcome the Avon and Somerset Police Authority as a founding member to the Southwest One joint venture.
"We are very much looking forward to working together with the Police to improve the already excellent services that they provide.
"This is a unique opportunity to share best practice and world class expertise between the police, Somerset County Council, Taunton Deane Council and IBM to deliver world class services to our customers in the Southwest over the next 10 years."
Cllr Jill Shortland, Leader of Somerset County Council, said: "This is a great development and we are keen to see the police join Southwest One with us as founding member. It's through collaborative working like this that we can deliver excellent customer-focussed services, cost-effectively."
Cllr Ross Henley, Leader of Taunton Deane Borough Council, said: "This is tremendous news. We are excited about the prospect of working more closely with the police over the next 10 years and are confident that Southwest One will deliver major benefits for our local residents."
Around 600 police staff undertake functions that will transfer to Southwest One - all those affected opted to remain employed by the police and second across to the joint venture company.
This means they are still public employees and retain their existing terms and conditions as well as their Local Government Pension Scheme entitlement.
The first wave of police staff to transfer to Southwest One is expected to be in June, when those staff in information technology roles move across. A month later, the remaining staff in roles affected by the agreement will then move across.
IBM was unanimously selected by both councils and the Police Authority in March 2007. At the end of September 2007, Somerset County Council and Taunton Deane Council concluded negotiations by signing a contract with IBM.
In December, the final balance of staff transferred from Somerset County Council and Taunton Deane Council to Southwest One.
It brought the total number of staff from the local authorities now working for the new joint venture company to 800.
The joint venture includes a framework agreement to allow more than 30 other public sector bodies to acquire similar services.
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