The Shaftesbury Society has sold its furniture recycling business to employment charity Pecan in a deal that will create the largest household recycling project in London.
It will sell goods at affordable prices and offer training and work experience.
Shaftesbury's Resource Centre dates back to 1892 and distributes 7,000 pieces of furniture a year.
"This is an exciting development," said Jo Kuhrt, assistant director of development and regeneration at Shaftesbury. "We are confident Pecan will continue putting Christian care into practice."
The social enterprise, to be called Morph, will take over Shaftesbury's 500 sq ft warehouse and distribution centre in Camberwell, south London.
It will include a carpentry workshop in Bromley, a furniture shop and a web retailer.
Kevin Belcher, chief executive at Pecan, said: "This move enables us to improve the service we offer our trainees, thanks to substantial economies of scale."