DHL is to supply goods and equipment to NHS hospitals and GP surgeries, rather than NHS Logistics, in a deal worth £3.7 billion to the German distribution company.
Unions claim the move points towards the gradual privatisation of the NHS. When the deal was first proposed workers' union Unison balloted members on the possibility of strike action and the result is expected next week.
The Department of Health (DoH) has claimed that the move could save the NHS over £1 billion during the next ten years.
From October 1st DHL will be responsible for negotiating the purchase of products, including anything from bandages to catering supplies, and delivering them.
The move will transfer nearly 1,700 staff employees to the private sector.
Health minister Andy Burnham said today that NHS Supply Chain, the name of the new service, was a "good deal" for "staff, patients and the taxpayer" and that over 1,000 jobs would be created under the deal.
"NHS Logistics staff will enjoy, at the very minimum, the same terms and conditions as they have at present," he said.
"DHL will expand the business, invest in infrastructure, IT and customer services and through its sub-contractor Novation improve procurement. Consolidation of more NHS spend through this channel will allow the NHS to exercise its buying power and benefit from a wider range of products at more competitive prices," he added.
However, Karen Jennings, head of health for Unison, said that today "is a very sad day for the NHS".
"The government has not listened to the workforce or to reason. Staff across the NHS will be watching this privatisation deal which will be viewed by many as symbolic of what's to come," she said.
"Why break up an winning team like NHS Logistics and sell it off to a German parcel company like DHL? It makes no sense when there is no doubt that NHS Logistics is an NHS success story. It is a highly competitive, award-winning organisation and workers there are proud to be part of the NHS."