BDO AND PKF have agreed to merge following approval from partners at both firms.
Earlier this year, it was announced that the two top 20 firms were in advanced discussions to merge, which would create a firm with more than £400m in revenues and about 3,500 staff.
Accountancy Age revealed last week that the partners votes would be in by 7 December and that an announcement would be made before Christmas.
According to the latest announcement, the two firms will work under the BDO brand, with the merger to be completed by spring next year.
BDO and the amalgamated PKF will be a member of the BDO International network which brings in more than $6bn (£3.73bn) a year in revenues and operates in 138 countries.
Simon Michaels (pictured), managing partner of BDO, will stay in his current role until late 2016 following re-election to his second four-year term earlier this year.
"This is transformational, for our two firms but also the broader market. We're delighted that two firms with similar cultures and a focus on client service will combine to create an even stronger entity next year," he said.
"The merged business will have firm financial foundations and an ambition to grow. Both firms employ many talented people capable of delivering quality work to a range of clients, across audit, tax and advisory."
Martin Goodchild, managing partner at PKF, added: "The strategic decision to merge has now been made by the partners of both firms. Our primary focus as we move to completion will be to ensure both our clients and people benefit from the merger; they will be working with a resilient partnership leading from a position of strength and with a client service ethic at its heart."
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