Wigan MP Lisa Nandy led the celebrations as she hailed the scrapping of a controversial wholly-owned company following a council deal.
Ms Nandy congratulated staff at Wrightington, Wigan and Leigh (WWL) NHS Foundation Trust who had battled for months against the proposal to set up subsidiary organisation WWL Solutions.
The creation of the company, which would have employed almost 900 hospital staff including porters, cleaners and caterers, was axed on Friday after the Trust and unions agreed to a financial deal involving the town hall.
The issue had divided the borough for weeks, with three rounds of strikes and heated debate about the proposal.
Ms Nandy, who has backed the strikers and been heavily critical of WWL Solutions right from the beginning, said the union and employees’ victory was a significant moment.
She said: “This is an important step by the Trust and the council that will help to safeguard our NHS for staff and patients. It has been a long hard battle for the staff who are proud to work for the NHS and were brave and right to oppose these plans.
“We have been encouraged by the significant support from the public and from Unison and Unite who have been unwaveringly supportive.
“The sense of relief among staff is overwhelming. We now need to move forwards to repair relationships and ensure our local NHS continues to deliver good-quality care for people across Wigan.
“We have shown here what is possible if we stand together to defend our NHS and reject the path to privatisation.
“As the NHS celebrates its 70th birthday there are people across the country drawing inspiration from what has happened here in Wigan and thanking us for showing there is an alternative, while safeguarding our NHS for the future.”
Wigan was visited by major trade union names during the dispute, with TUC general secretary Frances O’Grady and Unison general secretary Dave Prentis both coming to the picket lines to spur staff on.
Len McCluskey, the general secretary of Unite who also had maintenance staff involved in the dispute, also gave his support as news of the deal broke.
He tweeted: “Fantastic news that plans to outsource 900 workers to WWL solutions have been withdrawn. They will continue to work for our NHS. Other trusts must follow suit.
“Our North West Unite members fought a tremendous campaign with NorthWest Unison. Solidarity and determination won the day.”
Twitter account Save WWL NHS, which backed the strikers, said: “Well we only went and did it! We stopped WWL Solutions from becoming a reality.”