The two authorities embarked on a new partnership to improve the city's parks and play areas in the autumn last year.
Now the first ball court and teen area with seating has been completed at Beaumont Gardens, nestling behind the Courtyard Centre for the arts.
"This is the first of three sites across Hereford that we're looking at and it shows what the benefits are of engaging with our local communities," said Cllr Anna Toon, leader of Hereford City Council.
"We've had representatives from the local community, the police and the two councils working together on this project and I'm pleased to announce that the other two projects - ball courts at Gorsty Lane, Tupsley, and Grandstand Road - have also been completed," she added.
Cllr Adrian Blackshaw, Herefordshire Council's cabinet member for economic development and community services, said: "We have limited funds which allow us to maintain existing parks and play areas, but not to create new ones.
"By working in partnership with the city council and the police - who have paid for the new teen shelter at the park - we've shown what can be achieved through this kind of partnership working."
The new area boasts a large ballpark, modern climbing frame and the shelter in a corner of Beaumont Gardens.
Both Hereford City Council and Herefordshire Council are keen to hear from anyone interested in creating a new play area.
Anyone interested should either contact Mark Inglis, assistant Hereford City Council town clerk, at atc@herefordcitycouncil.gov.uk, or contact Fran White at fawhite@herefordshire.gov.uk.