British Waterways will recommend to the Government next month that it should leave public ownership and become a charity.
The move would make the organisation, whose annual income is £223m, the 13th-largest voluntary organisation by total income, just behind the British Red Cross and ahead of organisations such as Barnardo's and the British Heart Foundation.
British Waterways, which would probably be rebranded with a new name, hopes the move will ease its financial difficulties, caused by a 47 per cent grant reduction from the Department for Environment, Food and Rural Affairs between 2003 and 2010.
A report by Think Consulting, the Compass Partnership and Bates Wells & Braithwaite said in November that British Waterways could generate up to £4m a year from voluntary sources after 10 years, but warned this would not be enough to meet the annual £30m gap between its current income and the amount needed to secure the long-term future of the 2,200-mile waterway network. The report said that switching sectors could lead to job losses.
But it also said the benefits would include the chance to recruit more volunteers, closer links with other conservation and heritage charities, and a clearer mission. It would also "liberate staff to further exercise their passion about the waterways", it said.
Mike Hudson, director of the Compass Partnership, said that other charities representing waterways users, such as boaters and anglers, would welcome British Waterways into civil society.
British Waterways has been debating its future since spring 2009.
A spokesman said the organisation would make a recommendation to the Government before this year's election, and that joining the third sector seemed the likeliest option.