The authority hopes to save £30m from ending the controversial deal.
Liverpool Council is set to end an IT services deal with BT, saving £30m over the next three years.
The authority took the decision to end the joint venture to provide IT services and a call centre to the council after the telecoms giant refused to drop the price of the contract enough to satisfy councillors.
This was despite leaked documents from a council investigation four years ago claiming BT was overcharging the authority £10m a year, though BT has questioned the findings.
According to an official council document, the council will now take on BT’s 60% stake in Liverpool Direct Limited (LDL), the group that provides the services, and will take full control of the company at the end of the month.
The document, to be decided on by councillors on Friday, said: "LDL has successfully delivered services and service improvement throughout its life. The relationship with BT has been central to this success.
"BT remains committed to serving residents and businesses in Liverpool and is recruiting a further 240 staff in Liverpool to support the growth of high speed broadband services."
It added that the end of the deal reflected BT’s shift away from the public sector market.