Updated with government statement at 5.45pm
The American University of Malta has been officially accredited as such by the National Commission for Higher Education.
Commission chairman Martin Scicluna said the AUM has been licensed to offer courses in Malta.
He said the decision was taken independently by the commission following a 14-month process which included detailed academic and financial evaluation.
The controversial AUM is still in the process of formation. It is being set up by the Jordanian Sadeen group with campuses in Dockyard Creek in Cospicua and Żonqor in Marsascala.
Asked why the commission had not waited for the institute to start operating before it could be assessed, Mr Scicluna said the project had attained all criteria to be recognised as a university.
The granting of the licence comes with a number of conditions, including an annual audit by Clemson University of South Carolina, which has entered into a contractual relationship with the AUM.
Mr Scicluna said the commission has not yet approved the building at Dock 1 in Cospicua for use as a university campus. He also said that the dormitories at Żonqor will eventually be run on commercial basis, accommodating some 1,000 students from the Middle East and Russia.
The controversy was whipped up when the AOM promoted itself as a university without having such accreditation. It was later referred to in Parliament as an institute.
In a statement, the Nationalist Party said the commission had acted as the Prime Minister dictated.
The procedure in the process was carried out opposite to procedure with the licence being issued not following the submission of an application which was then scrutinised but after the Prime Minister took his decision.
It was only then that an application was submitted and the licence issued.
Before the licence was issued, the Prime Minister challenged the process and started calling the institution a university in his political messages, tainting the process as a result.
The party insisted that the Commission should follow the process closely, specifically the conditions made and presented at a news conference, and not allow political pressure from the government to dictate its work.
This commission had the responsibility to ensure that the country's educational standards were not lowered but should continue to go higher, the PN said.
In a statement, the government said that a wide and independent scrutiny process confirmed how realistic and viable the government’s plan for a second university was.
Today’s decision, it said, was another important step towards the implementation of the government’s electoral programme - for Malta to have pluralism in the tertiary education sector through the biggest foreign investment the country had ever seen in the education sector.
From the very beginning, the government was convinced of the American University of Malta concept so it had no difficulty with the detailed evaluation carried out independently by the Commission for Higher Education in Malta.
This analyses, the government said, concluded that the project had the necessary credentials to be accredited as a university in spite of the fear some tried to instill.
The AUM, the government said, would be able to provide double the legal requisites to be licenced as a university - five courses at BA level, a Masters course and four courses at PhD level.
The government said it looked forward enthusiastically towards the continuation of work on the project which was to be another link in the chain of the positive change taking place in the country.