Birtley Town Council is to be abolished, after local residents gave it the thumbs down.
Gateshead Council will now take over in Birtley
From next April, Gateshead Council will take over its services and employees.
The decision means that means that householders will no longer have to pay a separate precept, currently £47 a year for Band D properties.
Residents were asked their views on the council's role and future, leading to a referendum which found 68% of people in favour of the abolition.
Councillor Paul Foy, leader of Birtley Town Council, said: "This decision is very sensible and will be widely welcomed in Birtley.
"The town council maintained a neutral position throughout our review and the referendum and were committed to listening to local people and seeking their views on what they wanted to see happen.
"They made those views very clear."
Councillor Mick Henry, Leader of Gateshead Council, said: "Birtley residents already have channels through which they can express their views, such as the Birtley Community Partnership, and we'll continue to place great emphasis on talking to the people of Birtley about issues that affect them."
The move was announced by the Office of the Deputy Prime Minister, and will come into effect next April.