Almost £10m has been secured by Nottinghamshire County Council to continue its free travel scheme for over-60s and disabled people.
The budget for 2011/12 is made up of £9.27m from the government and £460,000 from the county council.
The scheme was under threat as the Conservative-run authority needs to make savings of £150m over three years and up to 3,000 posts are at risk.
From 1 April, free passes will be handed out by the county council.
This is a change from the district councils allocating the passes.
Cabinet member for transport and highways, Councillor Richard Jackson, said: "Despite the financial pressures we are under at the moment, we have safeguarded the money to continue the additional entitlements for Nottinghamshire residents.
"Our scheme offers a generous entitlement while not being a burden to the council tax payer."
The over-60s and disabled people can use their free passes on public transport between 0930 GMT and 2300 GMT on weekdays and all day at weekends.