SEDBERGH and Casterton Schools are to merge from September, governors have announced.
Casterton has experienced a decline in pupil numbers in recent years, while Sedbergh School has been growing.
By bringing the two schools together governors said they had enabled Sedbergh to expand further at preparatory and senior levels while providing continuity of education for Casterton pupils.
The move means senior pupils at Casterton School will transfer to Sedbergh School.
Sedbergh Junior School will relocate to the Casterton site and be renamed Casterton, the Preparatory School for Sedbergh.
A statement issued by both schools read: "Pupils will benefit from a combination of the most talented teachers and impressive resources; particularly for music, sport, design and technology, as well as the rich heritage that both schools offer.
Andrew Fleck, Sedbergh School headmaster, said: "This is a truly exciting development.
"The creation of a superb new preparatory school at Casterton is a bold step, which will enable us to provide an exceptional start in life to our youngest pupils.
"The senior school will provide continuity of education to pupils who transfer from Casterton to Sedbergh.
"We are constantly seeking innovative means to improve the education we offer, be it through links with Cambridge University, internships in industry or the development of technology in the school.
"The greater size of the school will lead to a wider range of subjects, sports, cultural and social opportunities which will undoubtedly benefit our pupils and prepare them for the fast-changing world they will enter.”
Maxine Lucas, Headmistress of Casterton School, added: "There have been links between Casterton and Sedbergh Schools for many years.
"The new combined school will offer continuity to all Casterton pupils, particularly to those who are currently at key points in their education, in addition to enhanced facilities and greater opportunities for all.”
Hugh Blair, chairman of governors of Sedbergh School, said: “I am delighted that the governing bodies of Sedbergh and Casterton School have agreed unanimously to combine.
"This merger will create the pre-eminent prep and boarding schools in the north of England.
"Senior staff have worked hard to plan a seamless integration and I am confident that we will be able to bring the schools together in such a way that pupils only benefit.”
Colin Tomlinson, chairman of governors of Casterton School, said: “The amalgamation of these two fine, nationally and internationally renowned schools, both with a wealth of heritage, respected culture, high reputations for excellent standards and exemplary academic results, provides the opportunity to establish one of the best co-educational schools in the north of England.
"This will be achieved by combining the vast range of resources available from both schools. The prospects and enormous potential are immensely exciting.”
Sedbergh School was founded in 1525 and Casterton in 1823.