WHSmith has announced plans to open Post Office franchises within 70 of its high-street stores.
The agreement reached between the retailer and the Post Office Ltd follows a trial of the new service at six WHSmith stores.
In a statement WHSmith acknowledged that the integration of the Post Offices into its stores had been "complex", but stressed that customers had quickly seen the benefits of the move, including shorter queues and speedier services.
"This agreement secures the future of Post Office services in 70 towns and the full range of over 170 Post Office services will be on offer at the new WHSmith concessions," the retailer said.
WHSmith added that there was "an excellent fit" between the two well-known high-street brands and that the complementary products and services that each offered would allow its customers to enjoy further benefits.
Sunday opening and longer trading hours are set to be trialled by WHSmith as part of the agreement.
The rollout of the new Post Office branches within WHSmith stores is expected to be completed by the autumn of 2008.
Post Office bosses stressed that the public would be consulted over the transfer of some of its existing branches to the control of WHSmith.
News of the deal between WHSmith and the Post Office comes as the latter announces what it has described as a new "blueprint for a sustainable network of flagship Post Office branches".
"Our job is to provide the Post Office branches our customers want and use, and to do so in a sustainable way," said Post Office managing director Alan Cook.
"The combination of Post Office Ltd and WHSmith makes perfect sense for customers – there are a lot of natural links between the products we sell and we both believe that the combination of WHSmith store and Post Office branch will strengthen our respective businesses," he added.
The Post Office has said that there will be opportunities for staff who are employed at branches which are relocated to WHSmith to be taken on by the retailer at its new branches, but commentators warn that the move is unlikely to be welcomed by unions.
Under Post Office plans 373 branches of its existing 458-strong crown network will remain under the company's management.
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