The move could mean lower charges, better returns on investment and more choice of products.
One of the main advantages could be better rates of interest. On November 19 this year, for example, the best interest rate for a Child Trust Fund was 3%.
But the best rate for a Junior ISA was double that at 6%.
The changes could boost the savings held in the accounts of 6.1 million children across the UK.
Campaigners hailed the decision to end what they described as a "two tier" system.
But they expressed disappointment that the reforms will not be brought in until April 2015.
Chancellor George Osborne said the reforms would require legislation which would be brought in "as soon a possible".
He said: "The Government supports hard-working families who want to save for their children. So I'm delighted that, as a result of these changes, over six million children who currently have savings in a child trust fund will be able to benefit from better returns and lower charges on those savings in the future."
Danny Cox, head of financial planning at Hargreaves Lansdown, said: "This change will pave the way for a significant improvement in choice and outcomes for over six million children and ultimately lead to a full merger."