The merger, which came into effect on April 25, follows a fall in the numbers of parishioners at church services - which will continue at St Mary's.
The new combined parish is to be known as "the parish of Luton".
Grade II-listed St Matthew's was built in 1875-76 as the population of Luton boomed thanks to the hat trade, forming a new parish in High Town out of the ancient parish of St Mary's.
Currently, St Matthew's Church building is being used by a Romanian Orthodox Church for worship on a "temporary hiring" basis.
A spokesman for the Diocese of St Albans explained that the merger followed a two year consultation process, saying: "This returns St Matthew's parish to St Mary’s parish out of which it grew in the mid 19th century when St Matthew’s was built.
"St Matthew's former congregation have joined St Mary’s and other Christian churches across the town.
"The St Mary’s clergy and leadership team will cover the enlarged parish area, and St Mary’s Church are looking after the St Matthew’s Church building.
"The longer term aim is to have a church worshipping in St Matthew’s Church building. St Albans Diocese are discussing possibilities for other uses of the building with other church denominations in the area.
"In the meantime a Romanian Orthodox Church are using St Matthew's for worship under a temporary hiring agreement."
The Archdeacon of Bedford, the Ven Dave Middlebrook, who oversees Church of England churches in Luton and Bedfordshire, said: "Our vision is that Luton's churches should be vibrant places of worship with thriving communities. It is good to know that the worshippers from St Matthew's are helping to make that a reality.
"They are a valuable addition to the churches where they are now worshipping, and we know that the St Matthew's church building can find a new role in the community where it too can play its part in the life of Luton's diverse communities."