The merger, expected to be finalised in November, comes after on-again, off-again talks over the past few years that progressed rapidly over the past six months.

"We are both community-based organisations and we share very similar values and visions for empowering people with disabilities through employment," said McCallum chief executive Tyrone McCuskey.

"The last couple of years, like most businesses, we have lost a bit of momentum and coming out of COVID we were looking for bigger opportunities and more opportunities to partner with local businesses to provide services for them."

Mr McCuskey said the two organisations had worked together for a long time, and the boards of the two had discussed a merger several times previously but the timing never suited one or the other organisation.

"The boards have finally got together and decided we can be better if we are bigger so let's get together and start sharing resources, talent and ideas.

"The complexity of the NDIS, its impact ... we need to be efficient to meet the greater demands of clients and families as we come out of COVID - they want diversity and growth."

The two organisations support more than 600 people living with disabilities across Central Highlands and Northern Grampian shires through a range of services. Between them they employ around 520 staff with the number of employees growing as demand increases under the NDIS.

BRI chief executive Geoff Russell said the merger would provide more flexible and diverse work opportunities for its supported workforce, deliver more services to clients, members, commercial partners and communities and provide staff with more opportunities for career advancement and development.

"By bringing these two longstanding Ballarat organisations together, we are strengthening services for the people of Ballarat. We are proud of the opportunities we provide for people with disabilities. We give them real jobs in the recycling, packaging, event management, manufacturing and maintenance sectors - jobs that make a difference to their lives and to the commercial partners for whom we are fulfilling contracts," he said.

McCallum has provided adult disability services including long and short-term accommodation, respite care, day support, outreach services, lifestyle options and supported employment in Ballarat and St Arnaud since 1953 while BRI has offered supported employment at its Australian Disability Enterprise sites for 37 years.

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To minimise anxiety and ensure a smooth transition, the two organisations will continue to operate under their current brand names for the foreseeable future with the two employment divisions being operated under one management structure.

"Over time, once we realise what resources, talent and ideas we have we will merge all together but we will take it very slowly and do it in a measured way so as not to create too much anxiety," Mr McCuskey said.

Both organisations have committed to ensuring there is no interruption to business and all contracts and existing services are maintained.

Under the merger agreement, Mr Russell will transition his role to facilitate and support the merger, and Mr McCuskey will become chief executive of the joint operation.

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