Newcastle and North Tyneside councils are implementing a £1.8m shared e-mail, calendar and archiving system to save money.
The councils have gone to Northgate Information Systems for the managed solution.
Under the five-year contract worth more than £1.8m, Northgate will provide infrastructure and services for Newcastle's 7,000 users and North Tyneside's 4,000 users.
Terry Goulding, infrastructure services manager at Newcastle City Council, said, "Through undertaking a joint procurement exercise with North Tyneside Council we have realised additional efficiencies, and we look forward to strengthening this partnership further over the coming years."
Earlier this year, Newcastle City Council saw a major data breach of its payment systems.