This paper introduces a game theoretic approach to find the stable partition in a multi-node two-way relay cooperative network. In two-way relaying, since the direct link between nodes in a pair does not exist, every node is a transceiver and a relying node for other communicating pairs at the same time. Thus, the question of how to form a partition of nodes to improve the system performance in such a network will be answered in this work. The partitions formed in this work are derived by the formulated coalition formation games, which aims at maximizing overall capacity in the system. In addition, a merge-and-split algorithm is proposed to achieve the stable partition structure. Finally, the simulation results illustrate the capability of the proposed approach.