The move followed a decision to expand the remit of Barnsley Development Agency, which is owned jointly by the council and the local chamber of commerce.
It had worked mainly on social enterprise and inward investment, but is now to take on major regeneration projects, tourism and promotion of the town.
Executive director of development David Kennedy said: 'Following a rethink it was decided to extend its role.
'The council and the chamber of commerce decided the easiest way was to create a unified staffing structure under me.'
The change meant the agency's chief executive John Penney became redundant, but all other staff transferred to the council.
Governance of the agency, by a board drawn from the council, chamber of commerce and local organisations, remains unchanged.
Barnsley MBC hit the headlines last year for its mission to reinvent itself as a Tuscan hill village.