Young's and Charles Wells are to merge brewing operations to form a new company called Wells and Young's.
The move clears the way for Young's to sell its Ram brewery site in Wandsworth - which could raise as much as £100million.
Wells and Young's brewing operation will now be based at Charles Wells' site in Bedford.
Commenting on today's announcement, Young's Chief Executive, Stephen Goodyear said: "We are pleased to be able to announce the resolution of our brewing review and bring to an end the uncertainty that has surrounded our business for the past two years.
As I promised when we first announced that we were launching the brewing review in 2003, my head has ruled my heart
John Young, Chairman of Young's.
"The creation of Wells & Young's brings together two complementary brewing businesses with unrivalled brewing heritage. Having resolved our brewing options, we can concentrate on completing the sale of the Wandsworth sites, which would unlock substantial capital to continue to build Young's high quality pub estate and enhance shareholder value.
Beers still available
"Young's will continue to be a vertically integrated business with a substantial interest in a modern and efficient brewery. At the same time, this deal will enable us to make a step change in the financial performance of the Company.
"Importantly, Young's beers will continue to be available in all Young's pubs and to all Young's customers. We believe this is the best outcome for the Company, for customers, for employees and for shareholders."
Paul Wells, Managing Director of Charles Wells added:"We are delighted to be teaming up with such a prestigious and historic business as Young's. The merger of our respective brewing interests creates a significant new force in UK brewing, with strong and growing cask ale brands, operating out of one of the UK's most modern breweries. We look forward to a long and profitable partnership between the two companies."
John Young, Chairman of Young's said: "The decision to sell the Ram Brewery site in our 175th year was taken with some reluctance, for mainly nostalgic reasons, but as I promised when we first announced that we were launching the brewing review in 2003, my head has ruled my heart. I thoroughly support the decision to sell the sites and the merger of our brewing interests with Charles Wells, which takes Young's forward into the next stage in its history."
Young's will hold a 40% stake in Wells and Young's with the remaining 60% held by Charles Wells.
Young's also announced its end of year results today and said turnover was up 3.6% to £123.9million.