Santiago's Metropolitan University of Educational Sciences (UMCE) is to merge back with the University of Chile, Chilean education minister Mariana Aylwin has announced. The Chilean parliament is expected to examine a bill on the merger in October.
Ms Aylwin said that the last three months of "total loss of control" at UMCE, where the campus has been held under siege since the end of April, left her with no alternative.
Student demonstrations following the rejection last May of 450 grant applications brought lectures to a halt and culminated in hunger strikes, arrests and a petition by students and teaching staff calling for the rector's immediate resignation on the grounds of his inability to manage the university.
Originally a higher academy of educational sciences, dependent on the University of Chile, UMCE gained autonomy under a military government in 1981, obtaining full university status in 1985.
While many of UMCE's 4,800 students have been holding celebrations in the capital, the university's 330 professors and 660 administrative staff are divided over the decision and fear a confusing transition period.
UMCE rector JesNos Gonz lez said that he was surprised and offended by the news. He said that he would seek support in parliament to oppose the bill, adding that he intended to restore the university to normality and complete the term of office he had been democratically elected to fulfil.
Luis Riveros, the rector of the University of Chile, said that he accepted the government plans but was concerned about their financial consequences as his university had debts of 25 billion pesos (Pounds 31.6 million).
Maria Antonieta Saa, president of the parliament's education commission, said that while there was unanimous agreement that the university was not functioning properly, there were still many who rejected the solution of a merger.