LTE-WLAN Aggregation (LWA) at Radio Access Network (RAN) level offers better performance compared to other WLAN inter-working and offloading mechanisms due to its tighter integration. In rel.&13, 3GPP standardized an LWA architecture which works at the Packet Data Convergence Protocol (PDCP) layer of LTE eNodeB and provides packet-level steering. But this architecture provides sub-optimal performance because of various delays incurred on both sender (eNodeB) and receiver (UE) sides. To overcome this, we propose a new architecture LTE-WLAN integration at RLC Layer (LWIR) which works at the Radio Link Control (RLC) layer of LTE eNodeB. Along with this, Virtual WLAN Scheduler (VWS) which employs traffic steering scheme has been proposed. The VWS minimizes waiting time on Wi-Fi queue and thereby reduces out-of-order delivery at the UE side. Five different bearer selection schemes have also been proposed which provide efficient steering by smartly choosing a bearer to route some data onto Wi-Fi based on available bandwidth of Wi-Fi link. The VWS also contains an LTE feedback mechanism which coordinates with the LTE scheduler to ensure fairness as well as better utilization of system capacity. The evaluation considers collocated scenario in which LTE small cell (SeNB) and Wi-Fi Access Point (AP) are tightly integrated in LWIR node. We show that the proposed LWIR with VWS increases throughput up to 85\% when compared to LWA based packet-level steering. © 2016 IEEE.