Two hospital trusts in Surrey have agreed to work on developing a case for them to merge.
Ashford and St Peter's Hospitals and the Royal Surrey County Hospital NHS Foundation Trust said it was the best way to ensure high quality local healthcare with maximum benefits.
Over the last 18 months the trusts have worked together on several clinical projects to improve patient services.
Andrew Liles, chief executive at Ashford and St Peter's, said improving patient care for people in Surrey had been "at the heart" of the partnership.
He added that the merger would provide "the long term, sustainable, high-quality care that patients need".
Medical director at the Royal Surrey County Hospital, Christopher Tibbs, said the plans included "a clear vision" for the three hospital sites.
The Royal Surrey County Hospital would continue as an emergency and specialist cancer centre, with no planned changes to accident and emergency, maternity or paediatric services.
A merger would take up to 18 months to implement. A final decision is expected later this year.