The CMA said merging the Royal Surrey, Guildford, Ashford Hospital and St Peter’s at Chertsey would not lessen competition between trusts substantially.
The trusts announced in May 2014 they were working on the proposal.
The earliest date it can come into effect would be the summer of 2016.
“Our proposal will allow us to deliver a number of important patient benefits, including more consultant care at weekends and increased investment in facilities and technology,” said Suzanne Rankin, chief executive of Ashford & St Peter’s Hospitals trust.
Both trusts will now prepare detailed financial plans, while the CMA will prepare its final report that is scheduled to be published on 7 October.
The CMA has also invited the public to comment.
“While there is still a lot of hard work to do, today’s announcement marks a very positive step forward in our plans,” said Nick Moberly, chief executive of Royal Surrey County Hospital trust.
A potential merger between Ashford and St Peter’s and Epsom Hospital was halted in January 2013 because the two trusts were unable to develop a financially viable plan.