The education minister has been accused of a U-turn after withdrawing a consultation forcing a three-way merger of universities in south east Wales.
Leighton Andrews said Glamorgan and Newport universities want to merge sooner rather than later.
Cardiff Metropolitan University, which has opposed the merger plan, will not be forced to join them for the time being.
It welcomed the government's change in position.
Mr Andrews made a statement in the Senedd on Tuesday, outlining Glamorgan and Newport universities' decision to move ahead with a merger with effect from next April.
He said in the light of the "excellent progress" made by the two institutions on a merger, he had decided to cancel the consultation started involving Cardiff Met.
He said: "I will now await receipt of the business case being prepared by the University of Wales, Newport and the University of Glamorgan.
"I have of course made no decision at this stage and will carefully consider their case when I receive it."
Mr Andrews added that the Welsh government would work closely with the two institutions to ensure "a smooth transition, including consideration of any need for additional financial support".
Since November last year, he has made it clear he wants to create one new "super university" for the region.
But Mr Andrews told the chamber it was still his intention, so Cardiff Met may have only been granted a reprieve.
"The policy of the government remains that we wish to see a single post-92 university in south east Wales," he said.
Cardiff Met has fought to maintain its independence, claiming the merger plan was high cost and high risk, and not backed by a proper business case.
Barbara Wilding, chair of the board of governors at Cardiff Met, welcomed the dropping of consultation on a three-way merger.
"The university is pleased that the Welsh government has decided to cancel with immediate effect the statutory consultation process involving the dissolution of Cardiff Metropolitan University which we believe was legally and financially flawed," she said.
Both Glamorgan and Newport universities welcomed Mr Andrews' decision to allow their merger to progress.
A University of Glamorgan spokesperson said: "In this decision he has removed a potential risk of delay, clearing the way for us to move forward on schedule and to our robust timescale.
"The creation of a larger, modern combined university for our region will be hugely beneficial to the staff and students of both institutions and to the wider communities we serve."
In a statement, the University of Wales, Newport, said: "We are pleased that he has recognised the positive progress we have made towards the creation of a new university for south Wales."
Opposition parties in the assembly claimed the minister had been forced to back down because he was seeking to impose a decision.
Conservative education spokeswoman Angela Burns said: "This is a massive climb down for the education minister, but a win for diplomacy over belligerence and aggression.
"This entire sorry saga sends a clear message to the education minister that bully boy tactics do not work and the future of higher education should be based on collaboration and co-operation not enforced mergers."
Plaid Cymru's Simon Thomas said: "The Party of Wales warned from the beginning that the minister had gone about this the wrong way.
"From the outset, we called on the Welsh government to adopt a voluntary approach to the merger of universities because we do not believe that forcing a dissolution order on universities is the way to generate consensus and collaboration."
Liberal Democrat education spokesman Aled Roberts added: "I have always made it absolutely clear that my favoured way forward is one of voluntary mergers based on discussion and consensus."