The Macedonian government has agreed to legalise the ethnic-Albanian unofficial University of Tetovo.
Changes to the law on higher education were to be put to parliament later this month. Education minister Aziz Pollozhani said he was "optimistic" that the university would start to operate legally by the end of the year.
Mr Pollozhani said the government was seeking a way to validate degrees of existing Tetovo graduates - almost 400 left this summer.
Tetovo was established in 1994 after a fruitless campaign by Macedonia's ethnic-Albanian minority for Albanian-taught higher education within the state system.
When the internationally brokered deal ended the inter-ethnic conflict of 2001, part of the package was the provision of Albanian-taught higher education, but this stopped short of legalising Tetovo.
Instead, the Macedonian Slavs supported the multi-ethnic University of South-Eastern Europe, to be set up under European Union auspices.
Many Macedonian-Albanians were unconvinced that USEE would satisfy their needs and continued to press for recognition of Tetovo.
The Slavs, however, considered it to be a potential hotbed of Albanian separatism and continued to view its status as unconstitutional.
Earlier this year, the senior party in the ruling coalition, the (Slav) Social Democratic League of Macedonia, tried to break the deadlock with a proposal to amalgamate the USEE and Tetovo. The new body would be financed partly out of the Macedonian state budget and partly by international sponsors.
When this compromise failed to satisfy ethnic Albanians, Ali Ahmeti, leader of the ethnic-Albanian junior party in the coalition, rejected it as "incomplete" during talks with the prime minister, Branko Crvenkovski. It left the government no option but to recognise Tetovo.
USEE, which is technically private, opened in 2001 on land donated by the government. It has about 2,250 students and 115 academics, and it teaches in Albanian and Macedonian. All students learn English.