A statement issued by the charity, which is the government's strategic partner for early years and childcare, put the decision down to "funding pressures", stating that the transfer of services to Action for Children is designed to "maintain continuity for families".
Out of 4Children's 1,023 staff, a total of 85 will lose their jobs, with 727 transferring to Action for Children, 207 transferring to a local authority or other provider, with the future of a further four employees described as "uncertain".
Besides developing and influencing national policy, 4Children delivers childcare, family support and youth services across 151 settings, including children's centres, nurseries, schools and RAF bases.
Out of these, 93 will transfer to Action for Children, 53 to local authorities or other providers, with four set for closure and the future of one still undecided.
Under the transfer arrangements, the work and staff related to the early years and childcare strategic partnership will also move to Action for Children.
Once the transfers have been completed, what remains of 4Children will be placed into administration, the charity has confirmed.
Imelda Redmond, chief executive of 4Children, said: "The decision to merge many of our services with Action for Children has been made in the long-term interest of children and families.
"Recent changes in our contract portfolio and broader funding pressures have led trustees to pursue this managed transfer, which will strengthen the position of frontline services to withstand these pressures while continuing to deliver high-quality support.
"We are pleased to be joining forces with Action for Children, whose values, culture and organisational structure are an ideal fit for our own. This will help to create a smooth transition for staff and minimise any disruption to the children and families we support."
Sir Tony Hawkhead, chief executive of Action for Children, said: "The operating environment for charities is increasingly challenging. The overriding aim of our discussions is to maintain the best possible services for the children and families we support.
"Greater collaboration within the sector is something many charities are investigating and this announcement supports that approach. I look forward to welcoming 4Children families and the members of staff who support them across the UK."
Formerly the National Out of School Alliance and then the Kids' Club Network, the organisation was first formed in 1983 to develop after-school provision.
Current children's commissioner for England Anne Longfield spent 20 years at the helm of 4Children prior to taking up her new role last year.