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Plans to merge the County Durham and Teesside probation services are to be put before the government.
The two areas already collaborate on many aspects of their work, and the move has been described as "evolution rather than revolution".
If given the go-ahead, the new organisation, provisionally called the Durham Tees Valley Probation Trust, could be operational by April 2010.
The aim is to make the service more effective and efficient.
It would continue to operate at a local level with services based on relevant local authority or police basic command unit boundaries.
A project team to develop the plans is being established, and they will be submitted for government approval in May 2009.
Sebert Cox, chair of the County Durham Probation Board, said collaboration began more than 12 years ago in areas such as human resources and has now moved into finance and information technology.
"In many respects the proposal we are announcing today is a natural evolution of the process we have been developing over a considerable period," he said.
"Obviously there is a great deal of preparatory work to undertake before we submit our plans, but we are convinced that this is the right way forward is to build in our exiting links in order to deliver effective services to local communities and our partners in the criminal justice system".
Paul Harford, chair of Teesside Probation Board, said: "Change is always challenging, but we do believe that our long record of working together can make the process very much easier.
"Already our joint working has reduced administrative overheads by hundreds of thousands of pounds a year, and this should significantly increase.
"But it is not just about money, what really matters is giving our staff the best possible opportunity to provide a quality service".
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