Birmingham and Aston universities have moved a step closer to merging, setting closer collaboration aside as a "secondary option".
Senates at both universities last week endorsed a paper by Aston vice-chancellor Michael Wright and Birmingham vice-chancellor Maxwell Irvine that outlined their vision for a new institution.
The universities have agreed to move forward with the development of an academic and business plan for a fully integrated university.
A group of senior academics is to be formed to put the plan together within three months.
David Packham, Aston's secretary and registrar, said there was a "tension" between concerns over the tight timetable and the need to reach a final decision quickly to avoid planning blight.
"It is going to be tough to ensure we do a thorough job in the time available, but the last thing we want is for this to drift on, leaving academics and students unsure about what is going to happen," he said.
Mr Packham said the key point that had swung opinion in favour of the merger plan was that "size matters" in an increasingly competitive global higher education market.
"It is not a question of size for its own sake, but the fact that it gives you more flexibility and opportunities to innovate. Even Birmingham at the moment is not as big as many of our institutions. But together we would be a pretty powerful institution in UK terms, with about 29,000 students and a £300 million a year turnover," he said.
The main criterion for deciding whether to go ahead with a merger would be whether it would provide more opportunities for academics and students, he added.
"We have reached a milestone in the debate, but this will be the key consideration in the coming months," he said.