The Junction, a five-year-old organisation in Leith which supports youngsters, was stunned when Holyrood announced a similar project under the same name last month.
Following an e-mail campaign, officials have backed down. Manager Sam Anderson said: "Our name is really important to us. It was chosen by the young people we support and we are based on Great Junction Street.
"We couldn't risk confusion with this new project from the Scottish Government so we asked them to change it. It didn't seem likely at first, but thankfully they've done it now."
Ministers said in May they were launching the Junction scheme to help youths aged between 14 and 17 who were "on the cusp" of offending, funded by money raked in through recovery of crime proceeds.
This instantly sparked concern within the Leith Junction – which helps local 12-21-year-olds – because it could cause confusion, suggesting its members were also on the verge of a criminal life. After a campaign, the Scottish Government has now confirmed that it will "cease with immediate effect from using the title The Junction".
A statement said: "Quite clearly, the case which you and your many supporters have made for there only to be one The Junction is overwhelming and one that we accept on the basis of the arguments which you have deployed.
"We are sorry for the confusion and concern which this has caused your colleagues and supporters."
Ms Anderson added: "It's important when you're working with young people that you are clear, and having something of the same name working with similarly aged people wouldn't have been.
"It's not a problem overall, there's a cafe over the road called Up the Junction, but that does something completely different.
"We are a registered charity and do have the trademark and it was a worrying time. We've spent five years building a reputation and simply don't have the resources to rebrand."
Holyrood is yet to decide on a new name for the 1.6 million project which will target youngsters in Edinburgh, Glasgow and Dundee.
It is hoped it will persuade hundreds of teenagers to divert from a career in crime into further education or gainful employment.
A Scottish Government spokesman said: "It is the case that after representations from the Junction that we should be the one that changes our name."