The WRU has confirmed it wants to halve the number of professional rugby regions from four to two.
The governing body says it's "optimum solution", unveiled on Wednesday, is the best option for the future of Welsh rugby.
But they insist no decision has been made yet on the location or branding of the two surviving teams, which would both field men's and women's teams.
Other options include cutting just one of the four teams - Cardiff, Dragons, Ospreys and Scarlets - or retaining four teams, but with unequal funding.
A four-week consultation will launch on 1st September, ahead of a final decision, due in mid-October.
WRU chief executive Abi Tierney said: "We are clear that the current rugby model in Wales is no longer delivering what our game needs. That’s why we’re inviting views on the opportunities for change we’ve put forward — so we can bring the One Wales Strategy to life."
“This consultation is about listening. No decisions have been made and it’s crucial that we work together. Every voice matters, including, critically, our professional clubs, and everyone must have a seat at the table to help shape the future of rugby in Wales."
The regional system was first introduced under then-chief executive David Moffatt, initially with five teams - only for Bridgend-based Celtic Warriors to be wound up after one season amid financial problems.
The governing body says out of four potential models, its preferred option to two professional teams - with equal funding - links best to its solution.
They argue the system will have the sole goal of creating "a winning Wales" - but they admit there are alternatives, such as less investment in some of the wider systems changes, which would then bring the other proposals into focus.
These are:
- Four clubs with unequal funding
- Three clubs with equal funding
- Three clubs with unequal funding
The WRU argues the two-club scenario would release significant investment to improve the semi-pro Super Rygbi Cymru league which began last season, thereby narrowing the gap between the heritage clubs and the elite game.
They add it would allow investment in the women's game to be accelerated, along with improvements to the academy structure and player pathway programmes feeding into the professional sides.
WRU director of rugby Dave Reddin said: "This is a genuine consultation process and while we have our own ideas based on the research we have done, we know the best solutions come from listening."
“The approach we have designed is respectful, thorough, and inclusive and we encourage people to challenge our ideas and help us create something that we can all get behind.”
Proposals also include eventually moving the two professional teams into one national campus, which according to Reddin, "would be a purposeful, collaborative space, a uniquely Welsh environment that other top tier nations would find difficult to replicate."
He said it would create "a sustainable, collaborative space that provides the competitive advantage needed to increase our performance levels in all aspects of the game from playing to coaching."
WRU chair Richard Collier Keywood insisted the consultation was a "once in a generation opportunity...to create an exciting future" for Welsh rugby.
He added: "Every player and fan story starts somewhere, and we have encouraged our teams to get a full range of views from grassroots through pathways, up to elite level."
“The important thing for us as a board is that, when we are presented with an updated recommendation in October, we know we will have listened and considered all the feedback and options before making a decision."
Reacting to the announcement, a spokesperson for Cardiff Rugby, which was taken over by the WRU in April, said: "As a club, we remain committed to ensuring professional rugby continues in Cardiff and will give all key stakeholders – included but not limited to employees, supporters and partners – the opportunity to provide comprehensive feedback."
"We welcome the opportunity to actively engage in this consultation process and will do so with best interests of Cardiff Rugby at heart."
The club added it was in the process of appointing a new independent chair to play "a key role" during the consulation.
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