Connect and Island credit unions are Tasmania's two biggest credit unions.

88% of Connect Credit Union's members voted in favour of the merger and 86% per cent of Island State members voted in favour.

Under the merger, a new entity known as "My State Credit Union" will be created.

The amalgamation is expected to save about six-million dollars in annual operating costs.

Staff of both credit unions have been promised that there will be no forced redundancies.