The agreement, which Orange Council's CEO David Waddell guaranteed would not lead to redundancies, will see the three councils looking at ways to minimise waste and overlap.

He used road crews in Cabonne Shire by way of example.

"Cabonne road crew are really good, they've got all the kit, and they're known for their road works," Mr Waddell said. "The RMS (Roads and Maritime Service) get them to do road works. We have a smaller patch and so we don't have such a big road crew. If I want to get something done I'll get straight onto Cabonne and (if available) they'll lend me a 'wet deal' - driver and equipment. Bang, it's done, instead of renting it."

Mr Waddell also said that a policy on asbestos, which cost Orange Council $40,000, could be shared with Blayney and Cabonne.

"All over NSW bureaucrats are writing plans and policies and essentially no-one ever shares. We've got a fantastic policy and there's no harm done in sharing it with Blayney and Cabonne, as long as it works both ways. They have just saved an immediate $40,000."

A bevy of mayors, deputy mayors and councillors descended on Orange's council chambers for the signing of a memorandum of understanding.

"Staff from the three councils have already been working cooperatively for years and we want to extend that," said Blayney mayor Scott Ferguson.

Cabonne Mayor Kevin Beatty pointed to the Netwaste network as "a good model for this new way forward together. We can negotiate a better deal with waste contractors by working together in an area like recycling, but at the same time we can each continue to operate different systems."

Orange mayor Reg Kidd said the arrangement "gets the balance right between a commitment to work on the projects we have in common, while retaining our local identity."