The decision was taken during a meeting of the Congress and the PPP leaders at Congress Bhawan here on Sunday.
In a joint statement issued after the meeting, District Congress Committee president Harbhag Singh Saini and PPP central committee member Balwinder Chaudhary said the decision to contest the elections jointly was taken keeping in view the aspirations of the people, who were fed up with the SAD-BJP government.
They said the decision regarding seat sharing would be taken later after holding mutual consultations.
They said efforts would also be made for an alliance with like-minded parties, including Left parties to defeat the SAD-BJP alliance.
Both the leaders asserted that the Congress-PPP alliance would win the municipal council elections.
Former Punjab Youth Congress president Bhupesh Sharma, former All India Congress Committee member Ramesh Goyal, PPP Rupnagar (urban) president Jarnail Singh Kabrwal, PPP Rupnagar (rural) president Balwant Singh Gill, Panchayat Samiti member Avtar Singh, District Congress general secretaries Ajit Pal Singh and Zorawar Singh Bittu and spokesman Rajeshwar Lali were also present on the occasion.