The charities announced in February that they had held merger discussions but confirmed today that they would join together after a due diligence process concluded that a merger would be a positive step.
The Shaw Trust helps disabled and disadvantaged people into work and has been a registered charity since 1982. The CDG helps people in London and the south east to return to work after periods of long-term unemployment and also became a registered charity in 1982. The Shaw Trust employs 1,000 staff and the CDG has 350 employees.
In the 2011/12 financial year, the Shaw Trust had an income of £86m and the CDG one of £24m.
The charities are finalising the details of the merger, which is expected to be completed by the end of the year.
Roy O’Shaughnessy, chief executive of the CDG, will serve as chief executive-designate for the new charity and Chris Melvin will continue in his role as interim chief executive of the Shaw Trust until the completion of the merger.
O’Shaughnessy said: "The opportunity to create a new charity to sweep away the barriers faced by those who cannot find work is our challenge. In succeeding, we will have changed lives, families and communities.
"By combining the heart, skill and dedication of those working at both charities with the need to meet future challenges in delivering services, we will be better together than apart."
John Briffitt, chair of the Shaw Trust, said: "The process we’ve been through has highlighted the benefits of blending the strengths of both charities, better serving those who are not working, including those with disabilities and those at disadvantage within society."