Hereford Hospitals NHS Trust has voted to share its back office functions with NHS Herefordshire and Herefordshire Council to help save £33m by 2020.
Shared corporate functions will include payroll, human resources, IT and some aspects of finance.
Streamlining services means about 100 mainly council workers' posts would be made redundant, the council said.
It said most job losses could be made through leaving vacancies unfilled. The plans were agreed last Friday.
NHS Herefordshire Primary Care Trust (PCT) and the council have been sharing corporate services, including a chief executive, for the past three years.
Older people's services
They invited the hospital trust to pool its resources too, to help them all save a total of £33m within the next 10 years through economies of scale.
The savings will be redirected to provide services for Herefordshire's ageing population and children looked after by the local authority, a council spokesman said.
The hospital trust's decision was recommended for council approval and would be voted on by full council on 19 November with the new systems potentially set up by April 2011, he added.
He said the back office functions could be centralised in the former Bulmer's building in Plough Lane, Hereford, which the council bought in 2009 for £4m.
Moving into a single building would enable the PCT, hospital trust and council to sell off up to 12 other buildings between them, raising additional revenue.
The council said sharing services would not reduce accountability as health care budgets and council budgets were ring fenced by law.
It said accounting would be clearly demarcated to ensure funds were not misdirected and the health trusts would be held to account by the Department of Health, while the council would continue to answer to councillors and the Department for Communities and Local Government.
From 2011, the council will also be obliged to publish any expenditure greater than £500, under new transparency laws being introduced by the coalition government.