The ten-year deal is worth £7.5m annually with the possibility of another ten-year extension.

Atkins was announced as winner of the deal in August and Skanska bought its highways division earlier this year for £18m.

The Peterborough deal covers highway maintenance, design services, street lighting and drainage cleansing.

It replaces four existing contracts and is designed to save the council save around £7.5m over the next ten years. There is also an option to extend the contract for up to a further ten years.

Ringway currently carries out highways maintenance, Atkins provides technical services, Volker Mews maintains street lighting and ADC handles gulley cleansing in the city.

The new contract starts on October 1.

Simon Machen, Head of Planning, Transport and Engineering for Peterborough City Council, said: “Skanska were the stand out candidates to take on this brand new contract in terms of quality and the price they could provide the service.

“This is a long-term partnership between the council and Skanska that will deliver essential services such as pot-hole repairs and traffic light maintenance.

“We are now working with Skanska to ensure a seamless transfer of operations between the existing contracts and the new contract, which will start on 1 October 2013.”

Skanska’s President and CEO Mike Putnam, said: “We have extensive experience of building and maintaining highways, and are committed to working with the council to create local job opportunities and provide excellent customer service.”