Peabody and Family Mosaic have agreed to merge together, creating a new housing group to provide 55,000 homes.
The two housing associations said the merger would give them greater resources to build more homes and community services, as well as provide better value for money for residents.
Lord Kerslake – current chair of Peabody – will become the chair of the combined organisation, while Brendan Sarsfield will become the new chief executive.
In a joint statement, Lord Kerslake and Mr Sarsfield said: 'The new group would build on the track record, capabilities and shared values of Peabody and Family Mosaic to create a truly distinctive organisation. Our combined scale and London focus would enable us to do more together than we could achieve alone.’
The formal merge is expected to complete around July 2017, but both groups will consult with residents first.