The decision follows the Local Government Review in Northamptonshire and the administration of both councls are now considering future options that will best suit the interests of its residents.
South Northants Council leader Cllr Ian McCord said: “We have had an excellent working relationship with Cherwell District Council that has led to impressive savings over a number of years and it is unfortunate that external events have led to this situation being forced upon us.
“We fully understand that circumstances in Northamptonshire have completely changed the landscape. CDC have had to consider their options and our separation is totally amicable.”
Cherwell District Council is now considering shared service arrangements under a joint chief executive with Oxfordshire County Council in which both organisations would retain separate councillor bodies, budgets and decision-making processes.
CDC leader Cllr Barry Wood said: “The knock-on effect of the situation at Northamptonshire County Council sadly has led us to have to consider terminating our current successful relationship with SNC.
"In line with our ethos we will consider all partnerships that fit with our culture. In short, we do not and will not, operate a ‘one size fits all policy’ but take individual decisions based on customer need and evidence."