In a statement, the commission said the new trustees would be responsible for resolving a breach of trust that it said took place in 2007 when the trust built a leisure centre on part of its land near the centre of the city and granted a new 75-year lease to Bath Rugby Club, which has used part of the trust's land since 1894.
To resolve the breach, the trust, which exists to provide sporting and recreational opportunities, proposed a trade-off in which the club would continue to use the trust land it uses at present and be allowed to use another piece of trust land so that it could redevelop the ground.
In return, the club would lease to the trust its former training ground at Lambridge, on the outskirts of the city, which would be used for "a wide range of recreational activities."
The council held a public consultation and the land swap was supported by 87 per cent of people that responded. But for the trust to proceed with the exchange, the commission ruled that its trustees had to be independent from the council, according to a spokeswoman for the commission.
The commission drew up a scheme to establish a new body of independent trustees for the charity and appointed Neil Robertson, head of operations at the regulator’s Taunton office, to review the case. He decided that the scheme to create a new board should go ahead.
He also updated the scheme to say that any agreement with the rugby club must include a clause to ensure that the club minimises disruption to local residents and to the users of the trust land.
The commission spokeswoman said that three trustees would be appointed today – two from the council and one from Fields in Trust, a charity that safeguards recreational spaces. She said additional trustees would be recruited to make a board of at least six people.
The commission’s statement said the new board could resolve the breach of trust either by agreeing to exchange the land, which has already been consulted on locally, or consider an alternative strategy. In doing this, they must act only in the best interests of the trust, the statement said.
David Dixon, chair of the existing Rec trustees, said: "As a result of this decision by the Charity Commission, we can now move forward to achieve the outcomes that hold an overwhelming majority of public support.
"The legal issues surrounding the Rec were difficult and complex, so we are delighted to get to this point. With the trust’s finances more secure, we can now plan with more certainty the future of this wonderful recreational facility."
Nick Blofeld, chief executive of Bath Rugby, said: "This is very positive news. However, there are still a number of issues to be resolved before we can bring forward any proposals."