The Waterways Trust, which has about 80 staff and a turnover of £4m a year, said an "agreement has been reached in principle" to merge when British Waterways becomes a charity in April 2012.
The trust said the two were merging because there would be considerable overlap between its work and that of the new charity, and this could create confusion for stakeholders, funders and supporters. British Waterways cares for 2,200 miles of the country's canals and rivers, while the Waterways Trust works to increase public use and enjoyment of inland waterways.
British Waterways, which had a revenue of £187.1m in 2009/10, announced in February last year that it planned to become a charity. In February this year, the organisation announced it would make 60 of its 1,700 staff redundant and instigate a company-wide pay freeze in the financial year to March 2012.
A spokeswoman for the Waterways Trust said none of its staff would lose their jobs as a result of the merger with the new charity. The name of the new charity was yet to be announced, she said, but confirmation of the new charity's identity was expected within the next month.
The trust said in a statement that full details of the merger would be "developed over the coming months", during which the Waterways Trust would continue with its programme of work. The Waterways Trust will continue to operate as a separate entity in Scotland, where it has eight staff.
Tony Hales, chair-designate of the new waterways charity, said: "This is tremendous news and will ensure that a very large part of the country's precious waterways heritage will be held in trust for the nation.
"The joining together of the new waterways charity and the Waterways Trust will give the new charity an enormous boost, not just by combining the physical structures and artefacts that make the waterways so unique, but through the collective knowledge and passion that each organisation's staff and volunteers bring with them."
Frances Done, chair of the Waterways Trust, who will retire from her role on completion of the merger, said: "Over the past 12 years we have learnt many lessons that will be important for the new charity.
"We have also seen success in a number of key areas, including fundraising, building partnerships and attracting and working with volunteers, and look forward to building on these as part of the new waterways charity."