As many as 800 jobs at Somerfield's Bristol HQ could be axed once its £1.6 billion takeover by rival Co-op finally goes ahead next month.

Monday's announcement, which has comes as a bitter blow for the city, will mark the end of an era in Bristol, severing the city's links with the supermarket that go back more than 130 years.

The Manchester-based Co-operative revealed yesterday that Somerfield would continue to be run as a separate enterprise for 18 months while it is integrated into the group's food retail business.

At that point, the Somerfield head office in Whitchurch, Bristol, which employs about 800 people, will close for good and the Somerfield name will disappear.

Some of the staff facing redundancy will be offered the chance to relocate to Manchester.

Somerfield has 10 branches in and around Bristol, employing 400 staff, and these will become Co-op stores in the next 18 months.

The takeover is expected to be completed in the first week of March, following the final go-ahead by the Office of Fair Trading.

The Co-operative's chief executive Peter Marks said he expected it to take up to two years to convert the 650 Somerfield stores into Co-ops – the firm is currently undergoing its own rebranding exercise.

The combined business will be the UK's fifth largest grocer with more than 3,000 outlets.

Tesco, Asda, Sainsbury's and Morrisons are the biggest four supermarket chains.

The OFT said the acquisition would be good for consumers, but it forced the Co-op to dispose of 133 stores in areas where it had concerns about competition. The Co-op has already sold a large number of the stores to rivals including Morrisons and Waitrose.

A spokesman said: "Following completion of this acquisition, which we expect to take place in early March, Somerfield will be run as a separate business for up to two years, during which time we will integrate the businesses and gradually replace the Somerfield logos with the Co-operative.

"The Somerfield Bristol headquarters will be retained for about 18 months, before all head office functions are moved to Manchester.

"Somerfield has some great people and during the integration process we will endeavour to offer relocation opportunities to as many of them as possible."

The Co-op is currently refurbishing its more than 2,500 food stores, as part of a wider £1.5bn rebranding exercise across the whole group.

Over the past two years, it has refitted more than 60 per cent of its 4,300 retail outlets, which include the Co-operative Bank and Co-operative Travel. John Savage, chairman of business services group GWE Business West said: "We've known for some time that the purchase of Somerfield by Co-op would result in a move of headquarter activity – it has been discussed for a long time.

"There is some hope that another company could come in and replace Somerfield in Whitchurch.

Somerfield was taken private by its current owners, a consortium led by Iranian multi-millionaire Robert Tchenguiz in a £1.1 billion deal in December 2005.

It began life as JH Mills in Bristol in 1875 but changed its name to Gateway in 1950 as the city was the 'gateway to the West Country'.

The Gateway name was dropped in 1994 and Somerfield was listed on the Stock Exchange two years later.