The scrapping of the Higher Education Funding Council for Wales (Hefcw) was announced in January.
A white paper has now been published inviting views on the proposed Tertiary Education and Research Commission.
It aims to make sure Wales has "the skills needed to succeed in an increasingly competitive economy".
The new organisation will manage funding for universities, further education colleges, research and skills.
It will also seek to improve links between higher and further education and Welsh business.
Publishing the white paper on Tuesday, Education Secretary Kirsty Williams said the aim was to make it "easier for people to learn and acquire skills throughout their careers".
"Our lives and economy are undergoing huge technological change," she said, adding: "Our national mission does not stop at the school gates.
"We need to ensure that those leaving our schools progress into a post-compulsory system which provides genuine parity of esteem for vocational and academic routes and which equips them with the skills required for sustainable and rewarding careers.
"Such a workforce will allow our economy to be more productive and competitive and our people more prosperous and secure."
Academic and workplace skills will be "equally valued" under plans to replace the university funding body, the Welsh Government has said.