Further education colleges are going to play a bigger role in offering degrees in England, as colleges are awarded funding for thousands of places previously held by universities.
Universities Minister David Willetts has announced that about half of the allocation of 20,000 lower-cost places will be in further education colleges.
Places were reserved for institutions with fees of £7,500 per year or less.
It will mean 143 further education colleges receive extra degree places.
Ministers want to make higher education more widely available through local further education colleges.
They are announcing they will fund about 9,500 degree places for college-based courses beginning this autumn out of the 20,000 held back for lower-cost places.
With some places held in reserve for appeals, it means more places are being awarded to colleges than to universities.
Mr Willetts has said there will be 60 colleges receiving direct funding for the first time from the Higher Education Funding Council for England (HEFCE).
But it will tighten pressure on places in universities, when combined with a recent funding announcement confirming that a temporary increase of 10,000 places will be discontinued.
This will mean that there will be about 19,000 fewer places in the university system than for last autumn's intake.
Application figures from the Ucas admissions service earlier this week showed that university courses were still going to be heavily oversubscribed this year, despite the increase in fees.
The places which are being announced are the so-called "core and margin", in which 20,000 places have been ring-fenced for institutions charging tuition fees averaging no more than £7,500 per year.
Universities and further education colleges were invited to bid for these "contestable" places on the basis of quality and value for money, as part of the government's plans for greater competition and market forces in higher education.
In response, a number of universities had changed their fee plans so that their average cost would be low enough to apply for these places.
There will be 35 universities or other higher education institutions sharing funding for about 9,300 places - with more than 1,000 places held back in case of appeals. All of the universities that applied received at least some places.
HEFCE received bids for more than 36,000 places. Along with 24 further education colleges having their bids rejected, there was also one unsuccessful bid for places from an academy.
The future extent of this "core and margin" has so far to be determined.
The government's White Paper, set out last summer, set out a vision of greater competition and fewer guarantees over funding, with the prospect of a wider range of providers offering degree courses.
But there has been continuing debate within government about how and when higher education legislation will be put forward - with suggestions that a higher education bill could be delayed.