Corowa and Urana will merge and become known as Federation Shire in an announcement made by Premier Mike Baird with Lockhart left to remain standalone.

The three-way merger was met with widespread condemnation when announced late last year and had it gone ahead Farrer MP Sussan Ley could have faced some short-term pain in the federal election campaign.

The same heat could have been felt by member for Albury Greg Aplin at the next state election even though he publicly voiced his opposition to a Corowa, Urana and Lockhart union.

Government-appointed delegate and Albury Thunder rugby league identity Mike Eden has been appointed administrator of the newly named Federation Shire.

He will replace Corowa and Urana councillors, who will finish up on Friday, until elections are held in September next year.

They were originally slated to be held in March next year.

Nine councillors will be elected to the inaugural Federation Shire council with wards not to be introduced for the first election.

Councillors will elect the mayor.

Corowa Shire's Chris Gillard is the interim general manager with Urana general manager Adrian Butler the deputy general manager.

Corowa mayor Paul Miegel said his council could finally move on minus the uncertainty.

"We always knew amalgamations were going to happen," he said.

"If everyone gets behind the new entity I am sure it will have a good chance of succeeding.

"Our job is to give it our best shot."

Urana mayor Pat Bourke said he was disappointed to learn about the decision via the media.

"We've been waiting all morning for a call," he said.

"It's very disappointing to say goodbye to the old council, but we don't have a choice.

"Our preference was to standalone, but if we were forced into a merger it was with Corowa.

"It will be hard, but will be positive about it because our future relies on it working."

Lockhart mayor Peter Yates told The Daily Advertiser: “Lockhart’s economy would have been devastated if the merger went ahead and it would have been hard to provide services.

“We lobbied hard and I’m so glad the community spirit shone through and common sense prevailed.”

Councillors who previously expressed an interest in staying on in a newlook council could be appointed to implementation advisory groups.

Mr Eden will select advisory group members.

The majority of Corowa councillors registered an interest in being involved in the new entity before the government appointed a single administrator.

Each new council will be given $5 million to meet the costs of merging and a further $10 million to kickstart new community infrastructure.

Mr Aplin said he had mixed feelings about the announcement.

"What I can welcome is the fact that, working together, we have been able to avoid a number of messy proposals," he said.

"In the end we will have a merger between Urana and Corowa Shires, who have had initial discussions on the possible outcome.

"We have dodged a number of bullets and must now look to the benefits that can come from having a larger number of residents and businesses within the one, regional council area.

"Federation Council has the potential to become a stronger advocate.

"The importance of this cannot be over-emphasised.