Spurgeon's College will soon be able to award qualifications in its own name after securing full degree awarding powers.
The Christian college said the approval from the Office for Students (OfS) marked "a critical step in the college's journey towards becoming Croydon's first home-grown university".
Students embarking on programmes of study in the next academic year will be the first to graduate with qualifications awarded in the college's name.
The award is not subject specific meaning that Spurgeon's can create new degrees in other disciplines.
The college called it a "significant moment" for the theological education sector and said that it was "helping to secure the future of theology in the United Kingdom".
Principal of Spurgeon's College, Rev Professor Philip McCormack said: "Securing degree-awarding powers marks a critical step in the college's journey towards becoming Croydon's first home-grown university, and we are incredibly proud to have secured approval from the OfS.
"This decision is the result of many years of work at the College to provide high quality teaching and develop a strong community of students and are looking forward to awarding degrees to our students in the College's name."
OfS said the college was "an emerging self-critical, cohesive academic community with a clear commitment to the assurance of standards supported by effective (in prospect) quality systems."
Shadow Secretary of State for Justice and MP for Croydon North, Steve Reed said: "Spurgeon's College has a crucial role to play in supporting opportunity and access to quality higher education in Croydon.
"The OfS's decision to award Full Degree Awarding powers is a vital step in the College's journey and ambition to become Croydon's first home-grown university, and I want to congratulate them for this fantastic progress."