Under the new structure, Dairy UK and the Dairy Council will focus on promoting human health and nutrition, while farmers' levy body DairyCo and the NFU will concentrate on farming issues such as animal health and welfare. All the organisations have pledged to work together on environmental issues.
The council was previously funded equally by DairyCo and Dairy UK. But following its integration into the Agriculture and Horticulture Development Board, DairyCo decided it could no longer use levy-payers money for projects beyond the farmgate.
The Dairy Council's move from its offices in Covent Garden to Dairy UK's HQ in Baker Street will be completed by 1 April.
The move would allow the Dairy Council to focus on its nutrition work and give it more opportunity to educate health professionals and journalists on the benefits of dairy, said director Judith Bryans.
The loss of DairyCo funding would be countered by savings on office space, and DairyCo would continue to purchase some services from the council, she said.
Bryans rejected suggestions the Dairy Council could be swallowed up by Dairy UK and disappear following the move, claiming it would retain its name and identity, and would operate as a wholly owned subsidiary and a separate legal entity. Last year the British Cheese Board was integrated into Dairy UK, which had raised question marks over the board's future independence.
The NFU also backed the move, despite last year's spat with Dairy UK when it withdrew its membership, claiming Dairy UK no longer represented farmers.
"To meet farmers' expectations in promoting dairy farming's credentials, it is vital that the gaps that exist in our knowledge and data are addressed," said chief dairy adviser Hayley Campbell-Gibbons. "This move will lead to a clearer focus on key issues and research needs."