The Education Ministry wants to upgrade its Office of Higher Education Commission (Ohec) into a ministry to lift university standards.
The goal is to turn Thai universities into research and innovation drivers, and highly skilled and qualified workforce providers, in line with the 20-year national strategy and the Thailand 4.0 vision.
"Our higher education system is facing a crisis," said Udom Kachintorn, former president of the Council of University Presidents of Thailand.
"According to the Times Higher Education University Rankings 2016, Thailand had only one university among the top 100 universities in Asia and none in the world's top 400.
"Our universities have been held back by a lack of genuine enthusiasm about funding."
Dr Udom was recently appointed by Education Minister Teerakiat Jareonsettasin to head a special 15-member committee to study and oversee the process of coming up with a Ministry of University Affairs, as the new entity will be called.
He said other problems included many university graduates being incompetent in their fields, a surplus of graduates in social sciences, and a lack of qualified graduates in technology and vocational fields.
It is crucial for the country to have a clear direction for long-term development, he said.
Setting up a new ministry will solve chronic problems in tertiary education such as a lack of good governance, internal conflicts on some university councils and some universities offering substandard courses or running programmes without proper permission.
"The Education Ministry does not have the full power or authority to intervene in the administration of universities because they all have their own University Act or law that stems from the push for decentralisation. However if the new ministry is set up, some regulations will be changed to ensure such problems will not repeat themselves," Dr Udom said.
Dr Udom said he will start selecting members of the committee to draft the legislation and call the first meeting this month.
"We expect to spend about six months writing the draft of the ministry bill. After that the draft will be sent to the cabinet and the Council of State for verification."
Dr Udom said the process of establishing the new ministry may take at least a year.
On Thursday, Assembly of Faculty Senate Chairs of Thailand president Rattakorn Kidkarn asked that representatives of the Council of University Presidents of Thailand, the Council of Rajamangala University of Technology Presidents and the Council of Rajabhat University Presidents of Thailand be part of the drafting committee to ensure every university gets a say.