Southwark Council worked with Shaftesbury Young People for seven months to develop the services it provides to the south London borough.
From next April, Shaftesbury will provide 25 specialist placements, which include semi-independent placements, long-term fostering positions in partnership with the charity Tact, short-term emergency placements and rehabilitation support.
Shaftesbury will also provide a parenting team to support children, both while in placements and after they move out.
Chris Saunders, head of service for children in care at Southwark Council, said: "The service will support young people going back home and moving from residential to foster care."
Hilton Dawson, chief executive of Shaftesbury Young People, added: "It will be focused on the most difficult to place and needy in the borough."
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