Southampton Solent University plans to merge with a further education college in the city.
The Southampton City College campus is ten minutes' walk from the university and lies adjacent to its halls of residence.
Under the plans, innovative governance arrangements would see the college become a subsidiary of the university under a limited company structure.
Van Gore, vice-chancellor of Southampton Solent, said talks on various options for closer collaboration were under way, but that a merger was his preferred route. He hoped that this would take place at the end of the year or early in 2010.
Describing the merger plan as "vision-led", Professor Gore said: "The college has vocational courses that match ours very neatly - such as business, media, fashion, performance, construction and marine engineering. A major motive is to improve progression routes from further to higher education within Southampton."
He added that both parties were in a strong financial position, heading off fears about cuts: "We are not planning to merge staffing or remuneration, we are not planning redundancies, and while there should be scope for enhancement by developing joint services, we would be looking to do that slowly," he said.
A merger would allow the university to offer a better co-ordinated skills and training service to employers, he said, pointing out that the college has more than 400 apprenticeships.
Professor Gore suggested that it would also help the university's efforts to maintain the number of students drawn from low socio-economic groups.
Lindsey Noble, principal and chief executive of Southampton City, said both organisations could improve their work-based higher education courses by working more formally together.
Last year, the University of Derby announced it was planning a takeover of South East Derbyshire College, but had to abandon its plans when the Department for Innovation, Universities and Skills asked it to consult further and update its statistics. John Coyne, vice-chancellor of Derby, said: "We were thwarted ... by circumstances that were beyond our control."