A customer contact centre will be built under the terms of the deal, in addition to a number of one-stop shops around the borough.
The 10-year deal, which is worth more than £40m, will lead to a major investment in new technologies and staff training, according to council officials.
Rotherham council leader Mark Edgell said, "We have joined forces with BT as part of our commitment to giving the customer a better deal."
The venture brings about major investment that would not otherwise have been possible, he added.
The strategy builds on the existing Rotherham Connect project to give local people round-the-clock access to council data via the Internet and telephone technologies.
Jonathan Prew, strategic services manager at Rotherham Borough Council, said it may develop the partnership further in its joint venture.
"This is something that is under consideration and will be discussed further with BT, staff and the unions," he said.
The deal follows Liverpool City Council's joint venture deal with BT, announced last year, which is a 10-year partnership and is worth at least £300m.