  We report on our investigation of the electronic structure of Ti$_2$O$_3$
using (hard) x-ray photoelectron and soft x-ray absorption spectroscopy. From
the distinct satellite structures in the spectra we have been able to establish
unambiguously that the Ti-Ti $c$-axis dimer in the corundum crystal structure
is electronically present and forms an $a_{1g}a_{1g}$ molecular singlet in the
low temperature insulating phase. Upon heating we observed a considerable
spectral weight transfer to lower energies with orbital reconstruction. The
insulator-metal transition may be viewed as a transition from a solid of
isolated Ti-Ti molecules into a solid of electronically partially broken dimers
where the Ti ions acquire additional hopping in the $a$-$b$ plane via the
$e_g^{\pi}$ channel, the opening of which requires the consideration of the
multiplet structure of the on-site Coulomb interaction.
