Carlisle City Council bosses have approved a £100,000 study into whether a unitary authority would be best for the people of Cumbria.
The move follows government plans for a shake-up of local government, which could see an increase in the number of large single authorities.
Cumbria County Council has already hinted that it would welcome a unitary authority for the county.
Carlisle City Council said it wanted a "full consultation" process.
Local authorities are due to reply to a government white paper by the end of January 2007.
Leader of Carlisle City Council, Mike Mitchelson, said: "The importance of this task should not be under-estimated and proper consultation and research needs to be undertaken before the city council considers its response.
"We want to ensure that Carlisle residents continue to have the highest possible standard of service, but we can do much more.
"The White Paper points the way for us and our partners to work more flexibly and responsively and ensure that our local communities have a bigger say in the things that matter to them."
At a meeting of Carlisle councillors earlier this week, concerns were raised after Cumbria County Council indicated its strong support for one unitary authority in the county.