They will come together under the Prince’s Trust name, although a decision on whether Fairbridge’s name will remain on its 15 centres has not yet been taken.
Martina Milburn, chief executive of the Prince’s Trust, will be chief executive of the merged organisation. Andrew Purvis, chief executive of Fairbridge, will step down at the end of March.
Fairbridge employs about 300 people and the Prince’s Trust employs more than 600.
A statement from the organisations said they were confident the decision to merge would help bring more funds into the youth sector.
When asked if either organisation was having financial difficulties, statements from the two chief executives said both organisations were on track to meet their budgets this year.
Milburn said the merged charity would aim to protect front-line delivery while seeking cost savings on administration.
"There are a variety of ways to do this, including recruitment freezes, filling current vacancies and consolidating suppliers," she said. "It’s too soon to tell if there will be any redundancies, but we will do all we can to protect jobs."
Purvis said it was an exciting development for young people who use the charities’ services and for their supporters.
"By joining forces we will be in a stronger position to help more young people," he said. "We will also become more efficient, which is important given the increasingly challenging funding environment."