Cumbria CC is to bring its highway maintenance service back in-house after deciding this would save money.
Highways staff employed by contractor Amey will transfer to the council when the contract ends in April 2012.
The move reverses a decision taken in November 2004 when Amery was appointed to a £300m partnership contract designed to save £7m over its term.
Cumbria has some 7,700kms of highways, 1,700 bridges and 44,000 street lights. It will still outsource street lighting maintenance and some specialist works.
Tony Markley (Con) Cabinet member for highways, said: “Our contract with Amey has delivered significant benefits, but there are always going to be limitations in any client/contractor arrangement.
“Any contractor will always factor in any unknowns in the area of reactive maintenance - which means the price of the contract can become higher than delivering it yourself.”
Workers who became direct employees would “have a greater sense of pride and ownership in their work”, he added.