A private security company has signed a deal to design, build and run a police station in Lincolnshire.
The agreement - between G4S and Lincolnshire Police - is thought to be the first of its kind in the UK.
As part of the deal, two-thirds of staff employed by the force would be transferred to the private sector.
BBC Home Affairs correspondent Danny Shaw said it was arguably the most radical solution to the budget cuts facing police forces.
It is thought the contract will save Lincolnshire at least £20m.
The Police Federation has raised concerns about the plan, saying police force staff have an "enshrined sense of public duty which private employees may not".
Under the plan, 540 civilian workers at Lincolnshire Police will move across to G4S, from April, in what is thought to be the biggest single transfer of police staff to a private company.
The police authority will pay G4S £200m over 10 years to deliver a range of services, including human resources, finance and IT.
Police authority chairman Barry Young said that, subject to planning permission, a new custody suite would be built at the police headquarters site in Nettleham, near Lincoln.
The security firm will also build a large police station in the county, containing a two-storey office block and a custody suite with 30 cells.
Ten other police forces in the country have expressed interest in becoming "strategic partners", which would see some of their services outsourced to the private security company.
Mr Young said: "By taking over a range of support functions, G4S will contribute to the force's aim of being able to put 97% of its warranted officers in front-line roles by April.
"Crucially, the new strategic partnership will also deliver significant infrastructure investment that will offset the budget reductions called for by the government. I believe we are leading the way."
Kim Challis, from G4S, said: "Lincolnshire is leading the way in responding to the challenges of today's economic environment and this transformation project will mean many of the services provided by the police will now be delivered externally by specialists who can deliver greater savings and improve efficiency.
"We are particularly delighted to have the opportunity to implement many new innovations, such as our purpose-built Bridewell custody suites - the first of which will be completed within a year."