The merger of two specialist health trusts working across County Durham, Teesside and North East Yorkshire has been given ministerial approval.
Last year County Durham and Darlington Priority Services NHS Trust and Tees and North East Yorkshire NHS Trust announced the merger plan.
They provide a range of mental health, and addictive behaviour services.
Ministers have approved the creation of a new organisation to be called Tees, Esk and Wear Valleys NHS Trust.
The new trust will provide all the mental health and learning disability services currently provided by the two existing trusts, as well as a range of addictive behaviour services.
It will employ the 5,000 staff currently working for the two existing trusts to care for a population of 1.4m living across County Durham, the Tees Valley and North East Yorkshire.
In 2005 the two trusts consulted staff, patients, carers and the public about the proposal to merge - prompting more than 300 responses and just seven objections to the move.
In a joint statement the two trusts said: "Merger is now the best option to allow us to... provide improved access to a greater range of specialist services that will make a real difference to the lives of all the local people we support."