Brake manufacturer Meritor, which owns the site in Cwmbran where facilities could be built, is backing proposals.
Joint plans from Coleg Gwent and Torfaen council will now be put to the Welsh government for approval.
A consultation with residents will then be held into the plans.
Councillor David Yeowell, executive member for education, said: "The proposal will see a new integrated post-16 centre built on land next to Morrison's supermarket in Cwmbran.
"The new centre will provide an equitable provision for all young people in the borough and is long overdue."
A new training and post-16 education centre could replace high school sixth forms in Torfaen after the council's cabinet backed £32.5m plans.