Five Birmingham colleges are launching a "collaborative partnership" to improve education and training for 55,000 students in the city.
The links, which fall short of a full merger, follow the Government's call for closer co-operation between colleges to increase efficiency.
The Birmingham scheme has already been offered as a model for other cities by one of the principals involved when he gave evidence to the parliamentary select committee on further education.
"It is a shining example of colleges' co-operation to provide the best possible education instead of being involved in cut-throat competition, " said Eddie McIntyre, of Birmingham's College of Food, Tourism and Creative Studies.
Collaboration between the College of Food and Tourism, South Birmingham College and Sutton Coldfield College has developed over the past six months. More recently, North Birmingham College and Josiah Mason sixth-form college have joined the partnership, to be known as Birmingham Community College.
Alan Birks, principal of South Birmingham, said that the federation was based on an American community college - although the devolved structure has also been compared to the European Union's Council of Ministers.
"We are not going for a merger at the moment because all of the colleges involved are in a strong financial position," he said. "Mergers usually occur when one of the partners is in some sort of trouble. We think we can gain from co-operation without the over-centralised planning that sometimes results in idiotic decisions."
Mr Birks said the partnership would cut out duplication in marketing, governor training, external funding and computer systems.
He added that some modular courses could be shared between colleges "providing a seamless web of opportunities for students".
For example, the College of Food would specialise in advanced courses, leaving lower level national vocational qualifications to others, who in turn would provide a stream of students going on to the College of Food.
South Birmingham will be run by a board of trustees, comprising the five principals and chairs of corporation from the member colleges. They will take turns at being chief executive and chairman.
A joint academic board will be made up of a senior curriculum manager from each college and one other member of staff from each college, elected by staff.
Other colleges have been invited to join, provided they are willing to sacrifice some autonomy. Mr Birks said the partnership did not involve redundancies, and had been welcomed by staff. "Everybody has been enthusiastic and is keen for this to work," he said.
* A similar scheme for five colleges in Greater Manchester was being considered as The TES went to press.