Massachusetts, expecting to save $8.2 million or 34% in investment fees over three years, is replacing its longtime short-term bond fund manager, Boston’s Fidelity Investments.

According a statement on Wednesday from state Treasurer Steven Grossman, Federated Investors Inc. of Pittsburgh won a competitive bid to assume management of the Massachusetts Municipal Depository Trust.’s nearly $10 billion portfolio.

“This new contract clearly represents the best deal for the commonwealth and its taxpayers,” Grossman said.

Created in 1997, the trust provides cash portfolio and bond fund management services for the commonwealth, several independent authorities and about 290 cities and towns.

Fidelity had held the contract for 35 years through subsidiary Pyramis Global Advisors.

Upon transition, Federated — which has more than $360 billion under management and invests in public funds in all 50 states — will operate under a three-year contract with the option for two one-year extensions. The firm, which began in 1955, plans a buildout in Boston.

Fitch Ratings and Standard & Poor’s rate Massachusetts general obligation bonds AA-plus, while Moody’s Investors Service assigns an equivalent Aa1.

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