The City of Lincoln Council said there will be no council tax increase until 2012.
The announcement comes as the City Council outlined its savings targets of around £1.5m over the next two years at a meeting on Tuesday night.
The Executive’s proposal to freeze council tax will come into effect from 2011/12, should it be approved by the council at a budget setting meeting in March.
From 2012 the City Council outlined in its Medium Term Financial Strategy (MTFS) that council tax will rise by 2.5% in both 2012/13 and 2013/14.
Then in 2014/15, council tax is set to rise by 3% and by a further 3% in 2015/2016.
The MTFS addressed the government’s reduction in grant to the council by £2.15m over the next two years.
The proposed strategy outlined a phased approach to tackling the deficit which would reduce the council’s budget by £750,000 in 2011/12 and a further £750,000 the following year.
The Coalition Government wants to ensure council tax payers are protected against any authorities that choose to reject the offer and impose excessive council tax rises.
Through the Localism Bill, the government plans to introduce a power for residents to approve or veto excessive council tax increases.
Any local authority setting an increase above a ceiling set by the Secretary of State and approved by the House of Commons will trigger a referendum of all registered electors in their area.
In the meantime, the Government can use its reserve powers to take capping action against councils who propose excessive rises.
Councillor Darren Grice, Leader of the City of Lincoln Council said the next two years are going to be difficult for everyone working in the public sector.
“Our biggest concern is not necessarily the amount we needed to save, but the timeframe within which we need to make the savings.
“That is why we have approved the proposal to use some reserves in 2011/12.
“To help minimise the impact on our residents we are also proposing to freeze Council Tax during 2011/12.”