Shropshire Council's leader, Peter Nutting, lost his seat in the major shock of last week's elections.
The result means the authority's majority Conservative group will pick a new leader next week.
Councillor Shaun Davies, Labour leader of Telford & Wrekin Council, paid tribute to the work of Mr Nutting, saying he had been key to a productive and successful relationship between the two authorities – which are ruled by groups of opposing political persuasion.
Controversy between the two councils has previously been stoked by Shrewsbury & Atcham's Conservative MP Daniel Kawczynski, who has called for Telford & Wrekin Council to be merged with the Shropshire authority – a move Mr Nutting had dismissed.
Councillor Davies said: "Obviously I would like to, on a personal level, thank Peter Nutting for his service to Shropshire, we worked very well as a council together on a number of issues and in my experience he was always a gentleman."
The Labour leader said they would be ready to work with the incoming leader of the council, with a decision on their identity expected on Monday afternoon, following a meeting of Shropshire's Conservatives.
He said there would be key issues for the councils to discuss, such as the future of health services, with the county's major hospitals – in Shrewsbury and Telford – still going through controversial re-organisation plans, that could see key services moved from Telford to Shrewsbury.
Councillor Davies said another major priority for co-operation is the planned Ironbridge Power Station development – which although within Shropshire Council's boundary, is likely to have a larger impact on the Telford borough.
He said: "As a council we stand ready to work with Shropshire Council on areas of joint interest and look forward to working with those Labour Councillors who have been elected bordering Telford & Wrekin, in Bridgnorth and Broseley.
"The whole agenda around health and social care and the integration of that is very important and we want to work with the leadership on that.
"Particularly the impact on services being lost at Princess Royal Hospital, which also has an impact on communities like Bridgnorth and Broseley.
"We also want to urgently sit down with them again about the Ironbridge Power Station project.
"There are 1,000 homes planned for the site and it will have a big impact on the borough with the majority of those residents looking to Telford & Wrekin for services.
"We also look forward to working with them on the local enterprise partnership and and combined authority on future projects."