This paper presents a novel method for an orbit transfer of service vehicle/payload using tether. The proposed system consists of a payload connected with a service vehicle through a fully deployed tether. A tether retrieval mechanism is provided at the service vehicle. The tether is retrieved using a suitable control law. The system gains the rotational velocity, while the tether retrieval proceeds and when the desired angular velocity is reached, the tether retrieval is stopped and the service vehicle/payload is deployed by cutting the tether, while it is along the local vertical and on forward swing. The Lagrangian formulation approach is utilized to develop the governing system of nonlinear ordinary differential equations for the proposed system. The numerical simulation establishes the feasibility of achieving high-altitude gains of the service vehicle/payload. The proposed method may be useful for future space applications.