The network, to be rolled out this year, will link clusters of local authorities, known as Warning Advice and Reporting Points (Warps), allowing them to exchange confidential information on security breaches, patches and fixes on secure websites.
The Office of the Deputy Prime Minister and the National Infrastructure Security Co-ordination Centre, which is responsible for protecting the UK's key services, are providing £250,000 of funding to back the project.
The Warp network will use automated software developed by NISCC and Microsoft to deliver alerts and best practice guidelines to each local authority.
The roll-out follows a year-long pilot by London Connects and 20 of London's 32 local authorities, which have tested the concept and shown that the idea can help time-pressed IT staff protect their systems.
One London council discovered that its servers were accessible on the internet and were being misused by hackers. It was able to alert other local authorities operating similar services and provide advice on protecting systems.
Local authorities in Kent are to launch the next Warp, Kent Connects, bringing together 14 local authorities this month. The plan is to extend the network to emergency services and local businesses over the next two years.
NISCC plans to extend the idea to the private sector and has been working with chambers of commerce on plans to create self-funded Warps for smaller firms.