A new NHS trust has been created to provide services for 1.4 million people living in County Durham, the Tees Valley and North East Yorkshire.
The Tees, Esk and Wear Valleys NHS Trust will employ about 5,000 people and have an income of £200m a year.
It takes over services run by the former County Durham and Darlington Priority Services NHS Trust and Tees and North East Yorkshire NHS Trust.
Ministers approved the merger after a lengthy public consultation.
The new trust will provide a range of mental health, and addictive behaviour services.
A trust spokeswoman said: "Mental illness affects one in four adults at some time during their lives, and the number of people with severe learning disabilities are on the increase.
"It is important that we are able to provide the care and support local people need."
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.