City University's academic council has given the go-ahead for a compulsory redundancy scheme but has agreed to review compensation terms.
Affected staff will be offered three months' salary and an extra one month for every three years they have served.
Council chairman Norman Leung Nai-pang said: 'We agreed that it was necessary for the university to work out a plan to tackle the issue of overstaffing.'
The university has about 2,600 staff and the redundancies are expected to affect both academic and administrative staff. Mr Leung said a working group would review the terms of compensation and report back to the council in the spring.
The university had shelved the scheme early last month in the wake of the economic downturn.
Mak Hoi-wah, an elected council member and assistant professor in the social studies department, said he had collected about 800 signatures from staff opposed to the scheme.