Blackpool Council could become the first public sector organisation to manage its own water and sewerage supply, after applying for a licence from regulator Ofwat.
If granted, the move will enable the council to manage its own retail services for more than 120 sites across the borough.
It is estimated the move will achieve cost savings of up to £194,000 over three years, with £50,000 being cut from bills in the first year alone.
The local authority says additional cost and consumption efficiency projects could generate further savings.
Blackpool Council has entered into a partnership agreement with self-supply specialists, Waterscan, which will manage retail functions, work directly with the wholesaler, provide consumption management and ensure compliance with regulations.
Councillor Fred Jackson, Cabinet Member Responsible for the Environment, said: “This is an exciting initiative and we are looking forward to the opportunities that a self-supply licence offers us in managing our water usage responsibly, efficiently and cost-effectively.
“There are many benefits such as reducing administration costs and cutting out the margin that goes to others in the supply chain. We will pay the price that retailers pay to the water company which will deliver significant savings.”