The development follows the closure of Evolution Studios by its owner Sony.
The 30-year-old Codemasters is a reputed video game developer and publisher, in which Reliance Big Reliance Big Entertainment had acquired a 60 percent stake in 2010. Members of Evolution Studios, also a developer, will join it to create fresh gaming content, a company statement said.
The two studios over the past 30 years have created some of the most successful racing franchises in the industry like Grid, DiRT, Driveclub, and MotorStorm.
"With phenomenal racing DNA on both the sides, this fusion will form the world's largest racing-focused games company and leverage the expertise from both sides to create the most-exciting racing games in the market," the Reliance Big statement said.
Mick Hocking, a former top honcho of of Evolution Studios, will take charge as vice president for product development at Codemasters and oversee all of the company's studios, the statement added.