The Bedfordshire and Luton Mental Health and Social Care Partnership trust board took the decision after agreeing there was no prospect of achieving foundation trust status.
The trust has not had a permanent chief executive since Paul Mullin stood down late last year.
Interim chief executive Patrick Geoghegan told HSJ: "We decided there was no point flogging a dead horse, let's do something that will help patients and staff in the long term."
The trust has a small revenue income of£70m and risks having some of its services commissioned to the third sector, Mr Geoghegan said.
"When you look at the challenges the trust faces over the next five years, it just isn't going to be financially viable," he said.
Business as usual
He said the decision had been taken with NHS East of England and it would be "business as usual" until the next stage had been agreed.
NHS East of England and Bedfordshire primary care trust will be carrying out a bidding process, expected to last between six and nine months, for foundation trusts to put forward proposals to manage the trust.
In a written statement, trust chair Alison Davis said: "The departure of Paul Mullin as chief executive in late 2008 concentrated our minds on what we needed to do to move to the next stage of development - that of attaining foundation trust status.
"However, we do not believe that with the current structure and size of the organisation there is any prospect of the organisation attaining foundation trust status in its own right within the timescale required.
"Having seen the energy, skills and enthusiasm in the leadership of other mental health foundation trusts, we have come to the conclusion that seeking a partnership with one of these holds the best prospect for delivering modern mental health and learning disabilities services for our local communities."
Bedfordshire PCT chief executive Andrew Morgan thanked the board for their work. "I respect and agree with their decision," he said.
NHS East of England chair Keith Pearson said the decision was "in the best traditions of non-executive leadership of the NHS."
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