The alliance between South Northants Council and Cherwell District Council is set to strengthen with more shared services leading to further savings of £12 million.
In 2011, the two councils merged their senior management teams and then combined waste management services last year.
The two councils have so far saved £3.3 million, with 17 redundancies and five posts cut but the latest agreement will bring about £12 million savings by 2025.
Mary Clarke, leader of South Northants Council, said: “If all goes to plan, we expect that over a ten year period, joint working could generate additional savings of £4m for South Northamptonshire and a further £8m for Cherwell.
“This helps to protect the front-line services which matter most to our residents.”
The two councils have begun a ‘lengthy process’ of working out how best to share services but it is not yet clear which departments will merge.