The University of Ballarat and Monash University's Gippsland campus may form one expanded regional university.
The two campuses are currently investigating a potential merger, which has been given in-principle support by State Higher Education and Skills Minister Peter Hall.
University of Ballarat vice-chancellor Professor David Battersby said if the new arrangement goes ahead, it would provide a wider range of courses to be offered at both campuses.
Monash University would continue to be involved at the Gippsland campus during any transition phase, with the new model hopefully taking effect from January 1.
"The University of Ballarat has extensive experience in delivering in-person support to students studying across a widely dispersed region, while the Gippsland campus has considerable expertise in delivering distance education and online learning," Professor Battersby said.
Monash University vice-chancellor Professor Ed Byrne said they had been looking at ways for the Gippsland campus to better meet the needs of its communities, including improving university participation rates regionally.
"Towards the end of 2012 the suggestion emerged to join the Gippsland campus with the University of Ballarat to form an expanded regionally focused university," Professor Byrne said.
"This flowed from the shared desire of the two universities to improve the delivery of regional higher education."