The merger, between the City of Bath College and Norton Radstock College, will bring together more than 3,000 full time and 1,000 part time students.
Norton Radstock College was given the poor rating after Ofsted said leaders had not carried out suggested improvements "with sufficient urgency".
Bath College will run from the Avon Street and Somer Valley campuses.
Principal Matt Atkinson said the merger would allow it to offer a wider range of vocational and academic courses.
The Ofsted report followed an inspection at Norton Radstock College in May 2014.
It said the leadership team had "not acted with sufficient determination to ensure that targets, actions and sharing of best practice have secured consistent improvement across the college".
It added since its last full inspection in March 2010 the college had "not improved significantly" and that the principal, senior leaders and managers have "been too slow to ensure planned improvements have enough impact".
Then the education watchdog described Norton Radstock College as a "satisfactory college with a good capacity to improve".
Two Somerset colleges have merged after one of them received an inadequate Ofsted rating.