Bangor University and the north Wales town's Normal College will merge on March 1, 1996.
The new institution will cater for 6,700 students, and the changes will mean that two higher education institutions across the road from each other are no longer both offering University of Wales degrees.
According to Alwyn Roberts, Bangor University's vice principal, there will be no staff redundancies.
He said: "The intention is to create a strong institution with more scope for development and expansion in the future."
Following the merger, the university's education department and the Normal College's teacher training provision will form a new faculty of education, to be located on the current Normal site.
Teacher training is the Normal College's strength, with two-thirds of its 1,100 students following BEd or PGCE courses at the college.
The Normal's other degree courses - in communications, tourism, administration and environmental studies - will join the university's faculty of arts.
Mr Roberts says that the merger will mean no reduction in the number of courses that are being offered.
He said: "We are fortunate that the two institutions are complementary.
"There is no duplication, so current provision will be maintained."
The merger has been on the cards for some time, but it is only since the Normal College became independent of local education authority control that such plans could be put into action.
Bangor's announcement, hard on the heels of last week's merger between Aberystwyth and the Welsh Agricultural College is being strongly supported by the Higher Education Funding Council for Wales.
It prefers fewer, larger institutions rather than a variety of smaller colleges dotted around the principality.
Both the Council and the Bangor institutions are confident that the merger will enhance Welsh language provision.
More Welsh medium modules will result in a greater choice for those students who wish to follow their courses in Welsh.