The new combined group will operate a total of 32 nurseries offering more than 2,000 childcare places throughout England.
The Co-operative Childcare has six nurseries in Oxford, Swindon and Gloucestershire. It is owned and operated by the Midcounties Co-operative, which started running nurseries under its original name, Imagine Co-operative Childcare, in 2003.
Buffer Bear was founded in 1992 by outgoing chief executive Dr Kay Turner, who took on the running of four British Rail nurseries after BR's privatisation.
The nursery group grew as a social enterprise business model, opening several nurseries under the Neighbourhood Nurseries Initiative, in children's centres and in workplace and NHS nurseries on hospital sites.
As part of the sale agreement, the new group will fund the charity Foundation for Children, set up by Dr Turner last year to help disadvantaged children under five.
Dr Turner will be chair of the trustees of the foundation.
Chief executive of the Midcounties Co-operative Ben Reid said that expanding the nursery arm of the business was part of the Co-operative movement's long-term strategy.
'I've personally spent time over the last two years reviewing the nursery market,' he said. 'We're very keen to expand now that we have a core and a new management structure.'
Linda Knight, The Co-operative Childcare's general manager, who was previously founder and chief executive of the Nunu chain of nurseries, will be heading up the expanded group.
The Buffer Bear nurseries will be re-branded under The Co-operative Childcare name this year.
Mr Reid added, 'From our experience in childcare it is clear people place a high level of trust in the co-operative approach to nursery care and early years learning. It makes childcare an ideal extension of our co-operative business model.'
Dr Turner said, 'I have given much thought to the best way in which to find a home for the nurseries which will enable them to continue to develop high quality childcare.
'Both I and the Midcounties Co-operative firmly believe their values closely reflect the values that underpin the development of Buffer Bear. For that reason I believe they are the ideal organisation to direct and control Buffer Bear in the future in a sustainable co-operative childcare enterprise.'
