Nottingham Imperial Building Society is transferring its £56m of assets to Newcastle Building Society.
Nottingham Imperial will transfer its assets in early 2000 to boost Newcastle's assets to more than £2bn and its membership to around 260,000 members.
Nottingham Imperial says it is merging with Newcastle in a bid to improve its customer services and increase the range of products it is able to offer members.
Members of Nottingham who held accounts before December 31 1998 will be eligible for a bonus.
The society says it will announce details of the bonus and staff restructuring in due course.