Spalding Jobcentre Plus will be moving in with South Holland District Council (SHDC) next Spring.
The move is part of a national relocation programme by DWP to co-locate with councils to offer a more joined up public service to residents.
SHDC deputy leader Cllr Malcolm Chandler said: “We are delighted to be working with DWP to offer residents a wider range of public services in one place. Not only will people benefit from being better served, but also this will help the council reduce its overheads for the running costs and maintenance of the building.
“It will also strengthen our position in south Lincolnshire by increasing our offer while we continue to talk to other key partners who would wish to deliver services from Priory Road.”
A Department for Work and Pensions spokesperson said: “Spalding Jobcentre Plus is becoming increasingly under-used, particularly as more of our services are offered online. Merging the jobcentre with the nearby council offices at Priory Road means we can continue to provide a first-rate level of service to our local claimants.”
The co-location on the ground floor of Priory Road will be complete by the end of March 2018. Council services will continue to be provided as normal during the reconfiguration works and the reception will remain open as existing.