The council had technically been leaderless
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Labour is to form the new council administration in Bristol after weeks of debate.
It comes after a meeting on Tuesday when the Lib Dems failed to win the Bristol City Council leadership, despite having the most councillors.
New council leader Helen Holland (Labour) said: "We are very much a minority group and we made it clear this would not be our preferred option.
"It's a watershed issue and proved we needed to take control tonight."
Councillor Peter Hammond is deputy leader in an all-Labour cabinet, whose election was supported by a number of Tory councillors.
Election results
The plan to privatise the jobs of home care staff in the city will be discussed in the near future, and now looks likely to be scrapped.
Labour has 25 councillors, the Lib Dems 31, the Tories have 13 and there is one Green representative.
The city council had technically been leaderless since Lib Dem Barbara Janke was sacked because of disappointing local election results for her party.
The Lib Dems had wanted councillor Steve Comer to take over.
But that nomination was vetoed by Labour and the Conservatives.