All 450 local authorities in England and Wales have been invited to join, which it is hoped will begin operating in April 1996.
The existing associations believe the LGA will allow local government to speak more forcefully to Whitehall and Westminster. In the short term, one of its prime aims would be to improve central government funding and see the abolition of capping.
The proposal also allows for the creation of a general assembly which would meet two or three times a year and provide a major platform for local government.
Speaking on behalf of all three association chairman, Sir Jeremy Beecham, chairman of the Association of Metropolitan Authorities, said: 'It is time to combine to seek a stronger system of local government, able to play its proper part in the government of the country. We will not achieve this if we are divided.'