The government has said there is a strong case for Norwich City Council to get unitary status.
If Norwich becomes unitary it would gain powers over education
It has ordered a boundary review before any final decision is made.
The move would give the authority control of education, social services and trading standards, but has been opposed by Norfolk County Council.
The council was against the plans, saying the changes would not be cost effective and would disrupt services, but this was disputed by the city.
Steve Morphew, leader of the council, said: "We always believed this was a means to an end and not an end in itself.
"We wanted the city of Norwich to be able to play its full role in taking advantage of the opportunities and tackling the challenges which lie ahead."
Norwich South MP Charles Clarke said: "I am delighted that the government has accepted the case for the City of Norwich to be a unitary authority."
Norfolk County Council leader Daniel Cox said: "Norwich hasn't been granted unitary status today, because the Government agreed with us, and many others, that the city council's bid did not meet its criteria for approval.
"In addition, we know that the vast majority of local opinion was opposed to it.
"We note that the Secretary of State is to ask the Boundary Committee to advise 'whether an alternative unitary proposal for Norwich based on revised council boundaries could deliver the required improvements'."
"In any event, there would have to be consultation on any options or proposals and clearly the local government family in Norfolk will want to consider the whole matter very carefully."