Mr Reed wrote: “My view is that the two unitary proposal is more likely to be financially sustainable.
“Putting Surrey’s local authorities on a more sustainable footing is vital to safeguarding the services its residents rely on, as well as investing in their futures.”
He said that having one council in charge in each area will see “quicker decisions to speed up house building and get vital infrastructure projects moving, while attracting new investment”.
Once approved, the government will pass a law abolishing the existing councils and establish new structures with the start expected in April 2027.
Tim Oliver, leader of Surrey County Council, said: “Reorganisation and devolution are huge opportunities, and this is good news for Surrey residents and businesses.”
A written statement was issued in parliament on Tuesday.