The decision was announced yesterday by the Minister for Further Education, Skills and Lifelong Learning John Hayes in a bid by the Government to cut red tape and give organisations greater freedom, following the earlier introduction of the public sector classification in October 2010.
The changes could have significant implications for the financial decision-making reporting of colleges due to the classification having previously brought further education colleges into government accounting boundaries.
Hayes said: “I am delighted at this very positive news which we have been working hard to achieve over the last year.
"The Government is committed to cutting red tape so that further education colleges have the freedom they need to make their own judgments on how to manage their affairs for the benefit of learners, employers and wider communities."
The decision follows a number of changes made by the Department for Business, Innovation and Skills and the Department for Education through the Education Act 2011, which will be introduced in April.
The two departments have planned to remove a wide range of restrictions and controls on further education and sixth form college corporations. This led to the decision to remove public sector control over them, allowing them to be put on a similar footing to charities operating within the private sector.
Speaking of the announcement, chief executive of the Association of Colleges Martin Doel said that the Association was extremely pleased that the Government had succeeded in getting this decision reversed, as it would allow for greater autonomy within further education colleges.
He said: "Allowing colleges to maintain their own affairs is not only beneficial to the institutions themselves, it also brings more clarity to the way public money is spent."
The National Institute of Adult Learning also welcomed the announcement, acknowledging the impact the decision will have on adult learners.
Director of Policy and Impact Mark Ravenhall said: "We welcome the announcement and the challenge made to the sector to deliver more innovative and diverse adult learning that is truly accountable to local communities.
"The decision also proves that just because colleges deliver good public services they don't have to be part of the public sector."
Despite many welcoming the decision, some questioned its impact during a time of stringent cuts within the further education sector.
General secretary of the Association of Teachers and Lecturers Mary Bousted said: "It’s all very well giving further education colleges greater autonomy, but autonomy to do what?
"Budgets have been slashed and the withdrawal of the EMA means that many students will no longer be able to afford to go to college, potentially impacting on budgets further."
Bousted added: "The key is not whether they are in the public or private sector but whether they can afford to devote resources to their educational activities. Until they have sufficient funding to carry out their educational objectives, any decision they take will be difficult."
(Pictured: Skills Minister John Hayes)