Scotland's regiments are to be combined into a single unit, Defence Secretary Geoff Hoon has confirmed.
The King's Own Scottish Borderers and the Royal Scots are to merge and join the other four infantry battalions in the new Royal Regiment of Scotland.
Scottish National Party MP Annabelle Ewing was thrown out of the Commons for calling Mr Hoon a "backstabbing coward" over the proposals.
Scotland's first minister said he was "disappointed" at the announcement.
Mr Hoon said the change was vital as part of a drive to improve efficiency in the deployment of soldiers.
Announcing a series of changes to the UK's armed forces, Mr Hoon told MPs that he was intent on ensuring an "Army for today and tomorrow", which would be able to meet the demands placed on it around the world.
He confirmed that the Royal Scots and the King's Own Scottish Borderers would merge and form a battalion of the new Royal Regiment of Scotland, which would have a single cap badge.
The other four battalions of the so-called super-regiment would be the Black Watch, the Argyll and Sutherland Highlanders, the Royal Highland Fusiliers and the Highlanders.
General Sir Mike Jackson, chief of the general staff, said the battalions would keep their roots in Scotland.
He said they would continue to recruit from the same areas and would still wear items such as the Black Watch's red hackle and the Highlanders' blue hackle.
Scotland's most senior Army officer, Lieutenant General Sir Alistair Irwin, said: "Change is never easy but we recognise there is a need for change and a need for the Army to restructure for the 21st Century.
"But in this reorganisation, each battalion has retained strong links to its local community, to specific items of uniform, and most importantly it has provided the link between the past, present and future.
"I am particularly pleased that our famous battalion names and traditions will live on because that is what I have been fighting for."
However, Save the Scottish Regiments campaigners condemned the announcement and accused the government of the "ultimate betrayal" in the decision to merge the Royal Scots with the Kings Own Scottish Borderers.
In a statement they said: "The retention of hackles and cap badges are meaningless as the Black Watch and the other five Scottish Regiments will cease to be their own regiment and will be swallowed whole to become known as The Royal Scottish Regiment.
"This is a meaningless gesture in the greater picture of almost 400 years of proud service to the country.
"The appalling decision to merge the Royal Scots with the Kings Own Scottish Borders will be remembered by all patriotic men and women of Scotland as the ultimate act of betrayal by this Labour Government and those cowardly, so-called Scottish MP's and MSPs - mainly Labour who deserted the men of those regiments in their hour of need."
Making the announcement, Mr Hoon said: "These plans will make the Army more robust and resilient, able to deploy, support and sustain the enduring expeditionary operations that are essential for a more complex and uncertain world.
"The move to larger, multi-battalion regiments that these changes bring about is the only sustainable way in which to structure the infantry for the long term."
Ms Ewing, the MP for Perth, was ordered to leave the chamber after she refused to withdraw her remarks about the defence secretary, whom she called a "backstabbing coward".
She was followed out of the Commons by the rest of her SNP colleagues, including party leader Alex Salmond.
Ms Ewing has been a vocal supporter of the Black Watch, which has its regimental headquarters in her constituency.
Later, she said: "I have every respect for the deputy speaker, but absolutely no respect for a shameful minister who has put Scottish soldiers in the line of fire and then stabbed them in the back."
She said she had received countless emails and letters from people supporting the Black Watch.
"The language used in many of those emails by Black Watch families was much less temperate than my own today," she said.
"There is a huge anger about what Hoon has just announced. It is seen as a stab in the back and a massive betrayal of the Black Watch and other Scottish soldiers."
Mr Salmond supported his colleague, saying: "Annabelle Ewing has broken the rules but Geoff Hoon has broken the hearts of Scottish soldiers."
The Scottish Tories also condemned the plans.
Scottish veterans have been campaigning against the changes
Conservative MP Peter Duncan said: "If the Blair Government thinks this is the end of this issue they could scarcely be more wrong.
"The fight to save Scotland's regiments is not over, it is just getting started.
"This act of lunacy must be reversed, and it will be reversed by the Conservatives."
First Minister Jack McConnell is now seeking clarification on Mr Hoon's pledge to retain regimental identities.
He said: "I have consistently said that it was possible to
modernise the structure of the Army in Scotland, while retaining the six regimental identities.
"While I recognise that the secretary of state for defence has to listen to views of the Army chiefs and I am pleased that the names and elements of the
identities of Scottish regiments have been retained, I am disappointed that these proposals have not gone as far as I would have liked."
The deputy leader of the Liberal Democrats, Sir Menzies Campbell MP, said it was a "gloomy day" for Scottish regiments.
"The fact that this profoundly disappointing announcement has been trailed so much in advance does not make it any less disappointing," he said.
"There is a case for reform but not for reduction and there seems to me to be no reason why this reform could not have been carried out while still maintaining the regimental system which has served us so well - particularly in Scotland."
Later, Labour suffered a defeat in the Scottish Parliament when MSPs voted to back a Tory motion calling for Scotland's existing six infantry regiments to be retained.