NATFHE regional official Paul Mackney said the deal for adult education staff in Leicestershire was "our alternative to the ELS agency".
The union-brokered deal allows part-timers to work on permanent contracts, while agreeing to accept the possible loss of a third of their teaching hours.
Mr Mackney said the in-built flexibility would eliminate the need for agencies, while preserving part-timers' employment rights.
Under the deal a lecturer working nine hours a week could have up to three teaching hours a week cut before being regarded as redundant.
Mr Mackney said: "I am certain that FE colleges currently paying outrageous fees to lecturing employment agencies will consider bringing employees under direct contracts using the Leicestershire formula. For these reasons the agreement represents a watershed in industrial relations for the further and adult education sector."
Mr Mackney, who has already declared himself a candidate for general secretary of NATFHE, is sending full details of the deal to branches across the country.