Mayors Eric Brewer and Frank Jackson signed a historic agreement making the change.
The changes start January 8th. Cleveland will assume maintenance and billing operations previously done by East Cleveland.
East Cleveland residents will get a $20 reduction for the first 1000 cubic feet of water they use per billing period. Rates will stay constant for five years.
Customers will now pay bills quarterly instead of every month.
East Cleveland's water and sewer operations had been a drain on the city. It's a big reason the city went into fiscal emergency 20 years ago.
And a corrupt deal with a company hired to manage the city's water operation helped put former Mayor Emanuel Onunwor behind bars.
Mayor Eric Brewer claims the switch will help boost home ownership and business interest in the community. He points to jobs and development in nearby University Circle.
And the deal will save the city about $2 million a year.
Some of that money will pay to hire back police officers and expand city services.
The deal also includes a tax-sharing agreement if businesses move between the two cities and a pledge not to "woo" companies from each other.
Click "Play Video" to watch story