A council has awarded the contract to run its libraries to an organisation it set up, to save the authority £500,000 a year.
Hertfordshire County Council, which runs 46 libraries, decided in October to contract-out the service.
At the same time it set up Libraries for Life, a "public service mutual" organisation, to bid for the five-year contract, worth about £10m a year.
It won the contract despite competition from other bidders.
Councillor Terry Douris, responsible for the county's libraries, said he was "delighted" that the organisation had won the contract following a "very detailed and robust procurement exercise".
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Libraries for Life - which has "grown out of the senior management team of the library service" - has also been awarded charitable status, saving an estimated £500,000 a year in business rates.
As an organisation separate from the council, but with a county councillor as a trustee, it will also be able to consider income from event sponsorship, philanthropic donations and alternative options.
Mr Douris said library users should notice no difference in services.
Despite the change, he said the council - which has a statutory duty to provide the service - was "absolutely committed to our library services".
The organisation's chairman of trustees, Robert Wilson, said: "The county council is rightly proud of its public libraries and we have created Libraries for Life as a new, Hertfordshire-based charity, to build on the talent and creativity of library staff and volunteers to ensure that the library service can thrive into the future."
Current library staff and volunteers will transfer to the new organisation.