Bowes FC, who play in the Crook and District League on a Saturday, and Wear Valley Sunday League outfit Barnard Castle FC have joined forces in time for the start of the new season.
The new club will play as a reconstituted Bowes FC.
Newly-elected chairman John Close said the decision to merge had been a mutual one, with both teams keen to increase the player pool.
He said it also made sense working together to raise funds and attract sponsors rather than competing against one another.
Many players have also turned out for both teams since Barnard Castle FC was formed four seasons ago.
This season will be Bowes FC's 126th, but the first as a two-team club.
However, despite finishing runners up to Shildon in the league and retaining the South Durham Bowl in their last campaign, the side struggled for numbers.
“It was a good season, especially when there were numerous games when we only had 12, 13 or 14 lads to choose from,” said Mr Close.
“In the league, it came down to the last game of the season against Shildon, who on the day were the better team and deserved to win the league,” he added.
Barnard Castle FC have enjoyed a meteoric rise through the Sunday morning league under the watchful eye of manager Jimmy Raine, who has been in charge for the past three seasons.
Having gained promotion from the third division two seasons ago, the side won the second division title at their first attempt.
A reorganisation of the Sunday morning league from three divisions to two will mean a busy campaign.
“We have 22 league games this time before we have even had a cup run,” said Mr Raine.
“We are hoping to be competitive and we go into the first division with no fear – we are going to give it a go.”
He said the Sunday side would also continue to give opportunities to young players wanting to play senior football.
The new season kicks off this weekend. Bowes FC’s Saturday side get their campaign underway with a home match against Heighington (kick-off 2pm).
The Sunday side travel to King James Academy for a game against Bishop Auckland Sports Bar (10.30am kick-off).
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