Under the contract, which is expected to cost Powys£5 million a year over 10 years, BUPA has agreed to invest£2m in the 12 homes. BUPA Care Homes managing director Mark Ellerby said the contract was the company's first in Wales.
It has already signed similar deals with Bedfordshire CC, the former Berkshire CC and Bromley LBC.
'Externalisation will guarantee services, jobs and the future of residential homes,' said Chris Mann, chairman of the Powys social services committee. 'It is clearly in the best interests of residents, staff and the people Of Powys.'