The new provider trust will run nine community hospitals and employ 3,000 NHS staff, with a budget of £400 million.
As alternatives to the social enterprise and competitive tender options favoured by the Government, this initiative is a potential challenge to NHS reform.
The decision follows a year-long local campaign against private sector involvement in Gloucestershire’s healthcare.
In 2011, NHS Gloucestershire tried to set up a social enterprise (or not for profit company) to provide healthcare services after April 2013. Local campaigners argued that this set-up would be vulnerable to private sector takeovers.
From May 2012 the authority conducted a public consultation in which 96% of 2,500 patients said they wanted the services to remain within the NHS.
NHS Gloucestershire Chief Executive Jan Stubbings said: “It is now time to look to the future and we are confident that everyone – staff, community partners and the public – will pull together to make sure that community support and local services are the best they can be.”