The semi-Markov decision model is a powerful tool in analyzing sequential decision processes with random decision epochs for a multi-state deteriorating system subject to aging and fatal shocks. In this paper, we propose a model for a two-unit standby system where a cold standby unit is attached to an operating (active) one. For this model, the active unit goes through a finite number of states of successive degradation preceding the failure, while the other one is in cold standby state. At each deterioration state of the active unit, two types of maintenance are considered, minimal and major, depending on the degrading level. The minimal maintenance aims to improve the degradation of the unit by recovering it to the previous degradation stage. The maximum allowable number of minimal maintenances for all states of the active unit must not exceed a certain limit. On the other hand, the major maintenance is necessary when the active unit fails. Once this maintenance is completed, the unit is restored to as good as new. To make the system operate more time without any interruption, the standby unit can be switched online until the active unit finishes its minimal or major maintenance. The switch between the two units is perfect and switchover is instantaneous. After using the standby unit, it is serviced or overhauled to maintain it in as good as new state. We use an iterative numerical approach, based on the policy iteration method, to drive the optimal state-dependent maintenance policy that minimizes the long-run expected cost rate of the system. Finally,