Manchester and Salford councils are planning to merge their legal teams in an attempt to meet budget cuts and they say more departments could follow.
The merger could save the councils about £5m between them, with lawyers and administration staff being pooled.
A formal agreement will decide how to split the savings if the plan goes ahead.
Manchester is making £109m in cuts this year and shedding 2,200 jobs, while Salford's cuts are £40m and 500 jobs.
A written agreement will determine how savings will be split between the two councils.
The team would be overseen by Manchester's legal management team and is expected to be introduced by 2012.
Manchester City Council said that the collaboration of the Labour-led councils is expected to act as a blueprint for further joint working between the two cities.
Proposals will be discussed in Manchester on 1 June and Salford on 14 June.
Sir Richard Leese, leader of Manchester City Council, said: "We have always maintained that Manchester would consider sharing services with other authorities and this is the first step towards creating a streamlined, more cost effective service."
Salford City Council leader John Merry, said: "This joint service means we can get the best possible legal services for both councils while also achieving the financial savings that come from having one team.
"In these difficult financial times it is important we work with our Greater Manchester colleagues to look at what we can do to get best value for money."