The ruling released today by the Nova Scotia Utility and Review Board says the town of Hantsport faces major financial challenges and can't keep meeting the needs of its citizens.
Several manufacturers have closed in Hantsport, including Fundy Gypsum and, most recently, Minas Basin Pulp and Paper.
As a result, the commercial tax revenues have dropped by about $1.2 million annually compared to what the town received when both plants were operating in 2009.
The board says hiking rates for the remaining taxpayers of Hantsport would place too heavy a burden on the community compared to neighbouring jurisdictions.
Continuing with Hantsport's status would present challenges in maintaining existing infrastructure, says the ruling.
A consultant hired by a committee overseeing Hantsport's transition concluded the town would require about $11.1 million to repair its buildings, sanitation, sewers, streets and water utilities.
The board says it approves of shifting the management of the community into the District of the Municipality of West Hants.
It says the growth rate in that area — which includes the communities of Falmouth and Brooklyn — makes it the best of several choices.
The warden of West Hants issued a news release welcoming the decision.
"We are pleased to help our neighbours and welcome all 1100 of them," said Richard Dauphinee.
"Today we will celebrate with them, but tomorrow the work of achieving the results envisioned during the process will begin."
A number of Nova Scotia communities are in the process of dissolving as the population of rural areas of the province has decreased and the ability of taxpayers to support local infrastructure has fallen.
In February, a Municipal Affairs Department report said Westville, Clark's Harbour and Mulgrave are no longer meeting enough benchmarks to be considered financial viable.
The towns of Springhill and Bridgetown have already voted to dissolve and seek amalgamation with neighbouring municipalities.