In a statement, Prostate Cancer UK said the two charities had decided to merge because it made sense to have a single organisation for men suffering from prostate cancer and prostate disease.
The new organisation will continue under the Prostate Cancer UK name and Owen Sharp, chief executive of Prostate Cancer UK, will lead it. Emma Malcolm, chief executive of Prostate Action, will remain as an executive director until the end of the year.
There will be no redundancies as a result of the merger and the charity will continue to offer all existing services, according to the statement. The combined charity will expand to about 140 staff by the end of the year, of which 12 will be from Prostate Action.
Staff from Prostate Action will move to Cambridge House in west London, the current offices of Prostate Cancer UK, over the next few weeks.
Paul Forster, chair of Prostate Cancer UK, will continue as chair of the combined charity. Six trustees from Prostate Action, including its current chair, will join the board at Prostate Cancer UK.
Last year, Prostate Cancer UK had a turnover of £18m; Prostate Action had a turnover of £4m.
Mark Bishop, director of fundraising at the new charity, said: "The decision to merge came about because of a meeting between trustees. It seemed as if this was probably the best thing for men with prostate cancer or prostate disease. From that point onwards it was obvious.
"From my point of view as a director of fundraising, it makes sense for donors to have a single organisation to relate to."
Prostate Action was itself formed in 2010 from a merger of the Prostate Cancer Research Foundation and Prostate UK.