Could university mergers become more common?
The University of Edinburgh has agreed to enter into talks with Edinburgh College of Art over a possible merger.
The governing bodies of the two institutions have given their principals permission to explore the issue of integration.
However, both establishments have agreed that a merger would not go ahead without consulting staff fully.
There are examples dating back to the 19th century of the university and the art college collaborating.
For some years, the two institutions have been partners in an academic federation which has encouraged working together across a broad range of research areas.
In 2003 the university became the accrediting body for the college's degree qualifications.
BBC Scotland's education correspondent Seonag Mackinnon
After years of tentative courtship the two institutions are holding formal discussions.
Staff have been notified marriage could happen within two years and the gift could be greater opportunities and economies of scale.
If banns are eventually announced - the big question - will other institutions follow?
It's widely held in the corridors of power that Scotland with a country of five million people is generously served with 20 higher education institutions.
Some argue mergers could achieve savings during the public spending squeeze.
Others argue mergers are hugely expensive to pull off and achieve little in the way of long term savings.
A Scottish Funding Council backed project has also led to the development of a joint initiative - the Edinburgh School of Architecture and Landscape Architecture (ESALA).
However, this is the first time that merger will be officially discussed.
The principals will also exam other ways of working together, including new programmes of study, taking forward groundbreaking interdisciplinary research, developing additional income streams and enhancing facilities, services and accommodation.
Professor Ian Howard, principal of the Edinburgh College of Art, said: "We already partner the university in a highly successful academic federation and the potential offered by closer collaboration is well worth exploring and may result in very exciting possibilities for enhanced teaching, research and creative endeavour."
Professor Sir Timothy O'Shea, principal of the University of Edinburgh, said: "The university and college, by working more closely together, could create a collective range of expertise and excellence that would offer an exciting range of opportunities not only for staff and students but also for the creative arts in Scotland."
Before a merger could take place the two institutions' governing bodies, the Scottish Funding Council and the relevant Scottish government minister would have to agree.
The institutions said change was unlikely to happen before 2012.