The University of Ulster could merge with the Letterkenny Institute of Technology.
It is being considered as part of a £1.3m study to improve links between the institute and the University of Ulster's Magee campus.
University Vice-Chancellor Professor Richard Barnett discussed a possible merger with the institute's president.
"The end is more higher education, more courses, and putting more development into this region," he said.
"We won't be hung up on the governance alone, although if we look at it and if we can best achieve these aims by merging and being one institution, that's what we'll do."
The North-West Gateway Strategic Alliance aims to enhance cross-border co-operation in higher education.
Paul Hannigan, President of Letterkenny Institute of Technology, said the scheme would build on the already strong links between the campuses.
"This new project will enable us to develop our joint capacity exponentially, and in doing so, we can deliver even more opportunities for students and industry in the north west through innovation."
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