Entertainment venues on the Yorkshire coast will be run directly by the local council from January 2021.
Scarborough Spa and the Whitby Pavilion have been run by Sheffield City Trust (SCT) since 2012.
SCT, which is subsidised by Sheffield City Council, had been told its own council funding was dependent on it ending loss-making contracts with other authorities.
Its contract with Scarborough Borough Council had been due to run until 2022.
The Sheffield City Trust, also known as Sheffield International Venues, had asked Sheffield City Council for £16.6 million due to losses it had incurred during the pandemic, the figure is £11.6 million more than had been budgeted for.
It had been told the city would not cover losses on its other local authority contracts and council wanted those agreements terminated.
An agreement to end the contract for the Spa, Whitby Pavilion and the Spa Cliff Lift and Peasholm Cafe, has now been agreed by Scarborough's cabinet, according to the Local Democracy Reporting Service.
The council's leader said he welcomed a chance to have a say in how the venues were run.
Steve Siddons: "Out of the problems that have been created here over the last six to nine months as always there are opportunities and we have to take those opportunities."
Eleven members of staff will transfer to the council and a short and medium-term plan for operating the venues will be developed, he added.