The deal with Virgin Care comes less than a week after outsourcing firm Serco won a £140m contract to take over community health services in Suffolk.
Under the deal, Virgin Care will take control of Surrey Community Health, the provider arm of NHS Surrey, which employs a quarter of NHS staff in the area. It is one of the largest community health providers in England.
The five-year deal runs from 2012 to 2017 and involves management of seven community hospitals, community nursing services, community dentistry, health visiting, prison health services and specialist services for physiotherapy, diabetes and renal care.
A statement from Virgin Care said the deal was ‘essentially a transfer of management’ and pledged that patients would continue to be cared for by existing staff.
The deal brings to a conclusion a procurement process that started in January 2011.
Anne Walker, chief executive of NHS Surrey, said: 'This is excellent news for patients, carers and staff in Surrey. The successful conclusion of a long, involved procurement process resulting in this contract signed with Virgin Care will bring best quality, safety and value for Surrey’s NHS patients, carers and taxpayers.'
Bart Johnson, chief executive of Virgin Care, said: ‘We are delighted to be working with Surrey Community Health and look forward to making a real difference to patient care in Surrey.'