After eight months of deliberations the point of no return has been reached. The two institutions will be dissolved. Then, in 2004, a "super-university" with more students than any other in the UK will be created. A new name is expected to be announced next year.
The search for a vice-chancellor will now begin. The current v-cs, Sir Martin Harris at Manchester and John Garside at Umist, are to retire.
A joint statement said the decision to merge, which is subject to satisfactory funding arrangements being put in place, opened the door for a world-class university that would attract the best students, the most talented staff and significant research funds.
Teaching and research in 50 academic subjects will be on offer.
A joint union steering group at Manchester said the merger's success depended on world-class employment conditions for all staff.
"This would be a golden opportunity to enhance the working environment, for example by removing existing disparities and by significantly reducing the high numbers of staff on fixed-term contracts," said Dave Jones, chair of the steering group.
"At this point, we still have numerous concerns arising from the negotiations so far and from merger proposals on the table. We recognise that there is a potential benefit in a closer relationship between Manchester and Umist. But one thing is certain, change of this magnitude will have a massive impact on Manchester, the region and beyond. It will involve a great deal of hard work and its success depends critically on keeping staff on board."