After years of speculation, the lecturers' union Natfhe and the Association of University Teachers agreed to begin moves towards unity.
The aim is to dissolve both unions and establish a single professional association to replace them by 2006.
Natfhe currently has 67,000 members, and the AUT 49,000.
Senior representatives from both unions met last week to agree the terms of the unification process which was discussed by the AUT's council and at Natfhe's annual conference earlier this year.
Paul Mackney, Natfhe's general secretary, and Sally Hunt, his AUT counterpart, described the initiative as "an ambitious and exciting undertaking".
They issued a joint statement which said: "A single new union will be a powerful force in representing and promoting the interests of the profession throughout further and higher education.
"Both unions are fully committed to ensuring the success of the talks, and we are confident of achieving our joint objective.
"This is an extremely welcome and positive development for all our members."
Initial proposals will be put to the national executives of the two unions in October, with firm recommendations to be put to their annual conferences next spring.
If those proposals are agreed, members will be asked to vote to dissolve the current organisations and create a single new union.
Natfhe's membership is drawn mainly from colleges and new universities while AUT members are predominantly from the old universities.
A Natfhe official added that the process is still at an embryonic stage and that a name for the new union has yet to be decided.
Brendan Barber, general secretary of the Trades Union Congress, attended last week's meeting. He said the TUC would lend its support if needed.