Exeter had applied to become a city unitary authority
Proposals to abolish some councils in Devon and merge them into new unitary authorities have taken a step forward after a legal challenge was thrown out.
The Court of Appeal rejected challenges claiming the Boundary Committee had not consulted properly on unitary proposals in Devon, Norfolk and Suffolk.
East Anglian councils which brought the action were refused leave to appeal.
The Electoral Commission will now hand its findings over to the secretary of state to decide on new Devon councils.
The Boundary Committee has recommended two models of unitary government in Devon.
One would create a single unitary authority encompassing all of Devon, except for unitary councils covering Plymouth and Torbay.
The other would create two new unitary councils: one for Exeter and Exmouth, and a second for the rest of the current Devon County Council area, again not including Plymouth and Torbay.
The East Anglian district councils which brought the action are considering appealing to the Supreme Court or directly to Ministers anyway. But, failing this, the way is clear for the government to finally bring the two-year process to an end.
A spokesman for the Department for Communities and Local Government said: "The Secretary of State recognises the need to end uncertainty and move forward and will be considering the judgment as a matter of urgency.
"It is now important that this whole process is brought to a conclusion as quickly as possible, and the Secretary of State will do all he can to achieve this."
The Boundary Committee will now recommend one or both of the models to the Secretary of State for Communities and Local Government.
He will then decide whether to change Devon's local government structure or leave things as they are.
The process began with Exeter City Council's bid for unitary status in 2007.
The government turned this down but asked the Boundary Committee to come up with alternative proposals for new unitary authorities in Devon.