The boards of both charities yesterday agreed the merger which will see the creation of a new organisation for family and childcare issues in the UK on 1 January 2013.
Plans to merge the two charities were first announced in July.
The new organisation, which will be renamed and branded in the New Year, will be led by Anand Shukla, the current chief executive of the Daycare Trust.
Katherine Rake, the chief executive of the Family and Parenting Institute, is to leave the charity and take up her new post as first director of Healthwatch England, an independent consumer champion for health and social care.
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