Governments in many developing countries acknowledge they are facing difficulties in their attempt to meet the basic health needs of their populations. They rely on contracting out to private (for-profit and not-for-profit) organizations as a strategy to meet the needs of underserved populations. For the most part, the public sector chooses to contract out primary healthcare services to the private sector to expand access, increase the availability of medicines and medical supplies, and improve the quality of care. In both urban and rural settings, private for-profit and non-profit health service providers serve both the rich and the poor. Communities often recognize private sector healthcare providers to be more responsive to their healthcare needs and preferences in terms of services available, suitable timings and geographical access etc. Private sector has always played a significant role in the delivery of health services in developing countries. Public-private-partnership (PPP) is an approach under which services are delivered by the private sector, while the responsibility for providing the resources rests with the government. Establishing a PPP requires a legal framework acceptable to all the partners, clarity on the commitment of resources, roles and responsibilities of each partner, as well as accountability to provide a given set of services at a desired level of quality and affordable user charges. Formalizing such an arrangement between partners requires conceptualising a framework for Public Private Partnership (PPP) to manage the delivery of health services. In this paper, we describe the design, development and implementation of a PPP for managing urban health services in Ahmedabad city, Gujarat. Our model has succeeded in bringing together compatible public and private partners to plan and deliver quality healthcare services to meet the community needs of Vasna ward, in Ahmedabad. The new Vasna Urban Health centre was inaugurated on July 23, by the Chief Minister of Guajarat. This new centre now serves about 120 outpatients everyday as against an average of 10 outpatients daily earlier.