King’s College London has signed an agreement to merge with Cranfield University, creating a new UK “super-university” that would rival many of its international competitors in size and research output.

The merger would result in KCL taking on another 5,000 mainly postgraduate students and become the second largest mainstream university in the UK, with about 47,000 students, overtaking the University of Manchester and behind only University College London.

Under the agreement the two institutions would merge by the end of summer 2027, with a name yet to be formally decided.

The government has already given preliminary approval for the merger to go ahead, which comes as the higher education sector in England is struggling financially.

Last year a merger was announced between the University of Greenwich and the University of Kent, while England’s higher education regulator, the Office for Students, on Thursday warned that universities “remain under continued pressure due to volatile student recruitment patterns and rising costs”.

Prof Shitij Kapur, KCL’s vice-chancellor, said: “The merger would bring new educational possibilities for students, new discoveries from academics and a clear focus on working in partnership with industry and government to support national resilience.

“This is a deliberate step to bring some of the best of the UK to compete with the best in the world.”

Patrick Vallance, the government’s science and innovation minister, said the merger “creates an extraordinarily powerful university … bringing together two world-class institutions and giving King’s a place at the heart of one of our most important regions for science and technology.

“It will create a driver of innovation and growth, capitalise on the complementary strengths and specialisms of both institutions and increase access, capacity and resilience across teaching and research.”

Cranfield, based near the town of the same name in Bedfordshire and with another campus in Oxfordshire, was founded after the second world war as a college of aeronautics. More than 90% of its students are postgraduates, concentrating on technology, engineering and management studies.

Prof Karen Holford, Cranfield’s vice-chancellor, said: “This merger is an exciting proposition for Cranfield, aligning our deep specialisms in engineering, technology, and management within KCL.

“It is an intentional step, which brings Cranfield University’s outstanding applied research, nationally important facilities, sovereign capability, and longstanding industry links to King’s, creating enormous potential.”