South Birmingham College and City College Birmingham, which have a 20,000-strong student population between them, have revealed they have been in talks to join forces to create one college.
Staff have been informed of the proposals and both colleges insisted that job security was “a priority”.
It is hoped the merger will be completed by the start of the next academic year, and one Birmingham union boss said he hoped the move would safeguard roles for the future.
Proposals have now been submitted to the Skills Funding Agency, and the merger is subject to final ministerial approval.
South Birmingham College principal Mike Hopkins said: “This merger is a great opportunity for Birmingham and will help us expand the first class education and training we currently provide.
"The combined expertise, staff and facilities of the two colleges will help us provide outstanding educational opportunities for our communities.”
The two colleges currently work together offering shared courses and jointly run a site in Bordesley Green.
The proposals come after an estimated 200 posts have been lost at City College Birmingham over the past five years.
Nick Varney, regional officer for the University and College Union, said: “We have had job losses at City College Birmingham before and we hope this puts an end to that.
“While we would need to see the paperwork and due diligence documents, we broadly support this merger if it creates a viable college within the city.”
South Birmingham College has 12,000 students on roll with campuses in Hall Green, Balsall Heath, as well as two centres in Digbeth.
The college carried out a £2.5 million refurbishment project over the summer, including the new Fusion centre in Digbeth, which houses fashion and textile courses and salon.
More than 8,000 students attend City College Birmingham campuses in Handsworth, Tyseley, Bordesley Green, Ladywood and Golden Hillock.