The University of Paisley and Bell College have confirmed £21m merger plans from August this year.
The university and college are already at the Crichton in Dumfries
The two institutions will cater for more than 16,000 students at campuses in Paisley, Hamilton, Ayr and Dumfries.
Deputy First Minister Nicol Stephen said both staff and students would benefit from the move.
The educational merger is still subject to parliamentary approval and a name for the new institution has yet to be confirmed.
Mr Stephen said it showed the executive's commitment to widening access to learning across the country.
"This merger will bring a university presence to Lanarkshire, as well as greater opportunities in west and south of Scotland," he said.
"The merged institution will link up with further education colleges close by to meet local needs and to provide strong support for students transferring from college to universities.
"Staff will also benefit from being part of a wider academic community with an opportunity to share best practice and research, particularly in nursing and healthcare."