The Communist Party of India (Marxist-Leninist) [People's War] and the Maoist Communist Centre of India on Thursday evening announced their merger.
The new party will be known as the CPI-Maoist, PW's state committee and central committee member Ramakrishna said in Hyderabad.
Under the plan the People's Guerrilla Army of the PW and the People's Liberation Guerrilla Army of the MCCI will also come together to form a unified PLGA.
The announcement introduces a new element to the first-ever direct talks between the naxalites and the government beginning in Hyderabad on Friday morning.
The PW leader said he and two other leaders of his party would participate in the talks as CPI-Maoist representatives.
Ramakrishna, who came over-ground along with two other leaders after two decades, said the PW's central organising committee general secretary Muppala Laxman Rao alias Ganapati was unanimously elected general secretary of the new party.
He also released a joint statement by Ganapati and Kishan, general secretary, MCCI.
He said the merger was finalised on September 21 but the announcement was withheld due to security reasons.
Ramakrishna said the move would strengthen the revolutionary movement and create fear among the "oppressors".
At a conference of chief ministers of nine states affected by naxalite violence in Hyderabad in September, the Union government had underlined the need to stop the merger of the two outfits as this could pose a bigger threat to India's unity and integrity.