As FE Focus reported last week, a change in the law meant colleges would lose charitable status if ministers kept their right to intervene directly in their affairs.
On Monday, Nicol Stephen, Scotland's minister for lifelong learning, announced that he would give up powers to direct colleges by the time the charities legislation comes into force in April.
Colleges south of the border have expressed a hope that the change in Scotland might herald an era of increased autonomy for them as well.
Mr Stephen said: "Charitable status is very important to colleges, providing a financial benefit of approximately pound;20 million per year.
"If powers of direction had been kept, this charitable status would have been lost.
"I am confident that there are sufficiently robust safeguards available to Parliament, the Scottish Funding Council and the new Charities Regulator to ensure our public investment in the college sector is adequately protected."
Ministers will still have powers to close a college or remove the board of governors in extreme cases, with Parliamentary approval. They also expect to use conditions attached to funding to influence colleges' policies.