Members of the New York Stock Exchange approved the Big Board’s merger with Archipelago Holdings, setting the stage for the world’s largest stock market to become a publicly traded company.

The vote caps a seven-month effort by Chief Executive John Thain to persuade the members that the transaction is the best way for the 213-year-old institution to compete as investors increasingly look to execute trades electronically.

By combining with Chicago-based Archipelago, the Big Board will also expand into trading of stock options and shares of companies listed on rival Nasdaq Stock Market.

“Bit by bit, everybody realized we have to go forward,” Tom Caldwell, who controls 41 seats as chairman of Caldwell Securities, said. “We are gearing up to compete within the industry. The New York Stock Exchange will be a very good investment going forward.”

Archipelago shareholders approved the merger yesterday, leaving approval by the Securities and Exchange Commission as the final obstacle to the deal. SEC officials said a vote on the matter is at least two weeks away. Mr. Thain said earlier this month he hopes to complete the transaction in January.

More than 95% of members who cast ballots approved the merger, the exchange said. More than 90% of the NYSE’s 1,366 members, or seat holders, participated.

Prices for both NYSE memberships and Archipelago shares have surged since the deal was announced April 20, amid optimism about the prospects of the Big Board as a publicly traded company. Membership prices have more than doubled to a record $4 million since the announcement, while Archipelago’s stock has nearly tripled.

The increase helped Mr. Thain gather support even as billionaire Kenneth Langone tried to make a rival bid for the exchange and a group of members filed a lawsuit claiming the deal shortchanged members and was arranged with conflicted advice from Goldman Sachs Group. Mr. Thain is a former president of Goldman, which advised both Archipelago and NYSE on the merger.

The lawsuit was settled on November 15 after the NYSE agreed to an independent evaluation. Citigroup subsequently concluded the deal was “fair.”

The NYSE’s seats will be exchanged for shares of the combined company, to be called NYSE Group, upon completion of the deal. That will redraw the Buttonwood Agreement, a two-sentence document signed by 24 brokers in 1792 that laid the groundwork for the exchange as a member owned organization.

“We give up the ability to say we are New York Stock Exchange members, which we had been able to do for 213 years and that’s difficult,” a member of the NYSE since 1973 who voted in favor of the deal, James Rutledge, said. “It’s been part of our identities for many years.”

Each member, or seat holder, will receive 80,177 shares of the combined company, NYSE Group, and about $300,000 in cash. They can elect to receive more stock and less cash, or vice versa. The standard offer to the members puts a $5.11 million value on each seat.