Liverpool City Council and Knowsley Borough Council have agreed to "share" Knowsley's executive director of regeneration, economy and skills Nick Kavanagh on a temporary basis.
Under the arrangement he will work three days a week on regeneration for Liverpool.
"It makes absolute sense at a time when we face such difficult challenges that two forward thinking councils should share their talent whenever possible," said Liverpool's leader Joe Anderson.
"By working together we are making a ground breaking move and one that makes the City region agenda real."
He said restructuring would make the Council a leaner, more efficient organisation.
Knowsley leader Ron Round said several councils are now considering pooling talent and it made sense to work together on regeneration.
"Working across two councils is still a relatively new idea and for that reason offers a hugely exciting challenge," said Mr Kavanagh.
"I will be working hard to ensure that my time is spent driving the two councils' regeneration agendas and ensuring that they are aligned for the on-going benefit of the city region. Who knows how this might affect the way councils work across the region? Working together in partnership will offer advantages to both organisations and this is an ideal opportunity to really put that into action."
