Labour and the Liberal Democrats have reached an agreement that sees Labour form a minority administration to run Lancashire County Council.
Under the agreement, the Liberal Democrats supported a proposal for Jennifer Mein, leader of the Labour Group, to become leader of the county council.
The proposal was passed at the annual full council meeting.
Coun Mein has formed a minority administration, with a cabinet made up of Labour councillors.
She said: “We are delighted that we will now have the chance to deliver on our pledge for jobs, especially opportunities for young people, and to help protect the most vulnerable in society.
“Reductions in central grant funding will make our task more difficult, but we will ensure we put the people of Lancashire at the heart of our plans for the future.
“We will work hard to serve the people of Lancashire and make it a county we can all be proud of.”
Liberal Democrat leader County Coun Bill Winlow, said: “I am pleased with this agreement. It is good for the people of Lancashire and will provide a green, fair and strong economy.
“We are looking to protect frontline services.”