The NCVO and Volunteering England are in discussions over a possible merger from 2013.
The Boards of both organisations have agreed the recommendations of a joint working party to have formal merger discussions over the summer and autumn this year. The working party concluded there was "a very strong case for full merger" and that "the closely aligned visions of both organisations could be better fulfilled by coming together". A merger would make both organisations more efficient and sustainable, but the new organisation "will enhance the work of both agencies and help deliver on a new vision for volunteering and voluntary action".
The new organisation will keep the NCVO tag and will retain the Volunteering England and Institute for Volunteering Research brands.
Formal discussions will now focus on detailed planning on organisations structure and staffing and membership services.
Chair of NCVO Trustees, Martyn Lewis CBE said: "We have encouraged the sector to consider mergers and collaboration and we are practising what we preach. By joining forces we will create a stronger voice and better support for voluntary organisations and volunteering."
Sir Stuart Etherington, chief executive of NCVO said: "This merger builds on years of close co-operation between NCVO and Volunteering England. We have a shared vision of how volunteering and voluntary organisations are at the heart of civil society. By pooling our skills and experience we will create a stronger champion for voluntary action.
Both organisations have suffered funding cuts in the recent past and have also announced plans to cut staffing levels. They are both already based in the same building in Regent's Wharf in North London.
NCVO is already the largest voluntary sector umbrella body and last year took over the resource base KnowHow NonProfit from City University as well as merging with the Third Sector European Network (TSEN).