Turkey and Germany are to establish a joint university in Istanbul - the first joint enterprise with a foreign country to open in Turkey.
On a visit to Istanbul last week, Angela Merkel, the German Chancellor, said the project was part of a wider programme.
She said the initiative would intensify "co-operation between the civil societies of the two countries" in science and culture.
The plan stems from a joint cultural meeting organised last month in Istanbul by the Ernst Reuter Foundation, aimed at fostering understanding between Christians and Muslims.
It is also hoped that the university will strengthen trade and business ties between the two countries. While many elite Turkish schools teach German, no university offers tuition in German.
Until now, Turkey's higher education authority and previous governments have been reluctant to allow other countries to be directly involved in the sector.
German government sources said the project was at a preliminary stage, but underlined that it would be a German-speaking university.