Talk to archsage Jubal Caledus who will tell you to place the three stones next to the three founders of the Scholia Arcana and then to return to him.
Place the three stones and as soon as you do a cut scene will start ending with you talking to Ciara Sydanus. Talk away, but it must of course end in bloodshed, so kill her off. Ciara's level will be set when you first enter the courtyard and she may be horribly underleveled once you finally fight here now.
Eran Methneen will run up to you and tell you that you are now the archsage