Members from the centre-right Radical Party and the smaller Liberal Party have approved their merger in a bid to become a stronger political force in Switzerland.
Radical Party leader Fulvio Pelli said that it was time for "all the liberal forces in Switzerland to join forces together".
The Radicals – currently the third largest group in parliament with two ministers in cabinet - and the small Liberal Party, are hoping to attract new voters. Both parties formally approved the move in meetings on Saturday.
The fusion means that the new Radicals-Liberals party will have the backing of 17.7 per cent of the electorate, said delegates. Their next goal is to overtake the second-placed centre-left Social Democrats.
The most popular party in Switzerland is currently the rightwing Swiss People's Party, which won 28.9 per cent of the vote in 2007.
The Social Democrats won around 19.5 per cent, while the Radicals and the centre-right Christian Democrats won 15.9 per cent and 14.5 per cent respectively.
However, analysts have already said that the merger would primarily be of symbolic value and unlikely to have a major impact on the party political system. There has also been criticism about the Radicals' lack of clear political direction.