The creation of a unitary authority in Northumberland will save £17m each year, according to the county council.
A county-wide council has been approved by the government, meaning the six district authorities will be abolished.
About 100 jobs, mostly senior management, will be lost but the majority of staff will be unaffected, said a county spokesman.
The district councils said their proposal for two authorities - rural and urban - had been ignored.
The plans by Alnwick, Berwick, Blyth, Castle Morpeth, Tynedale and Wansbeck councils, had been accepted as a bid alongside the county council proposal.
But on Wednesday the Department of Communities and Local Government gave the green light to a single authority.
Peter Hillman, Northumberland County Council leader, said: "I am delighted that we have this fantastic opportunity to create a brand new council and make real improvements for the people of Northumberland.
"Although the district councils put in an alternative proposal, what we all agreed on is that the current system of two-tier local government is confusing, wasteful and inefficient.
"There is a need for radical change and I'm delighted that the government has recognised that our proposals are the best way to bring this about."
The shake-up will mean less money wasted on bureaucracy and duplication, he added.
A spokesman for the districts said the government had ignored "overwhelming evidence" in support of a two unitary option.
Castle Morpeth Council leader Peter Jackson said: "It is outrageous to go against the wishes of the public who made it clear they want local accountable and effective local government.
"We need to address the problems and opportunities that are distinctive to the urban and rural areas of the county.
"I am bitterly disappointed at the outcome, but assure the people of Northumberland that we will be looking for answers and will be doing our best on their behalf."
The nine unitary authorities, to be created across England in 2009, are about "empowering citizens and communities", said Local Government Minister John Healey.