This study is designed to evaluate the efficacy and safety of vildagliptin in combination with metformin 500 mg bid compared to metformin 1000 mg bid in patients with type 2 diabetes.

Inclusion Criteria:

• 18-78 years inclusive
• Type 2 diabetes diagnosis at least 2 months prior to study entry
• Body mass index in the range of 22-45 kg/m2
• HbA1c in the range of 6.5 to 9% inclusive
• Fasting plasma glucose <270 mg/dL (15 mmol/L)

Exclusion Criteria:

• A history of type 1 diabetes
• Evidence of significant diabetic complications
• Treatment with insulin or any other oral antidiabetic agents
• Congestive heart failure requiring pharmacologic treatment
• Clinically significant renal dysfunction defined by metformin labeling criteria (serum creatinine levels >/= 1.5 mg/dl (males) and >/= 1.4 mg/dl (females)

Other protocol-defined inclusion/exclusion criteria may apply