The Government has approved the merger of Lincoln University and Telford Rural Polytechnic.
The merger brings together the country's smallest university and second smallest polytechnic - both specialists in the rural sector.
The union takes effect from the start of next year, creating an institution with more than 3000 full-time domestic students.
Lincoln University vice-chancellor Roger Field says the university will continue to provide the polytechnic's sub-degree courses.
But 80 of Telford's 950 full-time student places will next year be used for higher levels of education.
He says there will be some improvements in efficiency from the merger, but he does not anticipate any job losses.