They hope the merger will be completed by the end of the year. The new organisation will be known as Shooting Star Chase.
The current chief executive of Chase, David King, will be chief executive of the new organisation.
"The merger means we can continue to keep our promise to families to offer the best service possible now and into the future," said King.
Dalton Leong recently left the post of chief executive of Shooting Star.
A spokesman for Shooting Star said there were no immediate plans for redundancies but there would be a review of staffing structures that could lead to job losses.
It is hoped the new organisation, which will operate across London, Surrey and Sussex, will raise £7.5m a year.
Each organisation’s hospice building will remain open, but fundraising and support operations will be brought together in one location.