More than 2,000 LED streetlights are to be installed in Hull city centre at a cost of £1.2m.
Hull City Council said using white-light LEDs instead of traditional orange sodium lamps would cuts costs and reduce energy consumption.
The scheme is being paid for out of borrowing but the Labour-run council said it expected to repay the money within six years.
The authority currently spends £1m a year on electricity for street lights.
The council said the LED lamps would save it around £96,000 a year, at current energy prices, over their life-span.
Councillor Martin Mancey, portfolio holder for energy city, said the LED lamps were more reliable and would last for up to 20 years compared to six years for traditional lighting.