Queensland Premier Anna Bligh has announced state government approval for a merger of CQUniversity and the Central Queensland Institute of TAFE.

Premier Bligh said the proposed merger would create Queensland's first dual sector university.

"Combined there would be nearly 40,000 students making it one of the state's largest educational institutions based right here in Central Queensland," she said.

"The merger would combine the strengths of TAFE - practical skills training and job readiness - with the strengths of higher education - theoretical knowledge and links to research.

"This would position local students to make the most of the region's tremendous opportunities.

 "Central Queensland is taking off with new mines, new port facilities and new industries.

"The region is on the brink of a building and construction boom with $70 billion worth of developments expected to come on line in the next two years," she said.

"It's estimated the CSG and LNG industries will create 41,000 jobs over the next 20 years.

"Central Queensland is in the box seat to benefit from the unprecedented jobs growth as these new industries get off the ground.

"The proposed merger would create a tertiary institution that delivers both vocational and higher education - a ‘one-stop-shop' for skilled workers.

"There would be much greater flexibility for students. For example someone completing an electrical apprenticeship could change to a degree in electrical engineering without changing institutions.

 "This would be about equipping locals with the skills and talents needed to take advantage of these local jobs," the Premier said.

Combined, a new dual sector institution would service an area three to four times the size of Victoria.

While the Government has approved the merger, the final green light relies on the Commonwealth Government providing support under the Structural Adjustment Fund, further due diligence and an agreed position on governance and operational issues.

Member for Rockhampton Robert Schwarten said a dual sector organisation would go a long way towards helping the region meet the rapidly-growing demand for skilled workers.

"It's about striking the right balance.  We need to plan ahead to meet the skills and training needs of the region and at the same time, maintain jobs and job security for our TAFE and CQUniversity staff," Mr Schwarten said.

Member for Keppel, Paul Hoolihan said with billions of dollars in planned developments on the drawing board in the Central Queensland region, it is more important than ever to provide the best skills, training and education for local jobseekers.

"We want to be able to give local students the edge in the jobs market.  We're talking about decades of jobs in the pipeline," Mr Hoolihan said.

Member for Mackay Tim Mulherin said the ultimate aim was to create a tertiary institution that would serve the region well into the future.

"It's a golden opportunity to shape the future of tertiary education and training in our region. 

"There's a huge demand for skilled workers in the resources sector and supporting industries such as construction, health, community services and transport right across our region," Mr Mulherin said.

Member for Whitsunday Jan Jarratt said: "Industry and the community have been asking for the merger to take place to help meet future demand for skilled workers.

Employment Skills and Mining Minister Stirling Hinchliffe said while the merger was one step closer more work needed to be done. 

"In the meantime, we will work with all stakeholders to ensure that the best outcomes are achieved for both institutions and the people of Central Queensland," he said.

CQUniversity reported 19,000 students across 10 campuses in its 2010 Annual Report. 

CQIT delivered to 19,366 students across 7 campuses in 2010/2011 Financial Year.