Tewkesbury Borough Council will have its waste collected by local authority-owned firm Ubico from April 2015.
Councillors voted to move from the current in-house system to Ubico, which is owned by Cheltenham Borough and Cotswold District councils.
The council said that after a one-off set-up cost of £86,000, joining the new company will save borough taxpayers £364,000 by 2019/20, with annual savings of £99,000 thereafter.
Tewkesbury Borough Council’s lead member for clean and green environment Jim Mason said: “We know that our issues like waste and recycling collection, and street cleansing are extremely important to our residents, and we are really proud of the services we provide. This will not change, and, in particular, our residents should not notice a difference in the way their bins are collected.
“What this decision does mean, however, is that we can continue to provide the same level of service while also exploring how we can improve on what we do. On top of this we will be achieving significant savings, which will help us to make sure we are providing the best possible value to our residents.”
Ubico said that the existing environmental team will transfer to the company.