A micromechanics-based yield criterion is developed for a porous ductile material deforming by localized plasticity in combined tension and shear. The new criterion is primarily intended to model void coalescence by internal necking or internal shearing. The model is obtained by limit analysis and homogenization of a cylindrical cell containing a coaxial cylindrical void of finite height. Plasticity in parts of the matrix is modeled using rate-independent J2 flow theory. It is shown that for the discontinuous, yet kinematically admissible trial velocity fields used in the limit analysis procedure, the overall yield domain exhibits curved parts and flat parts with no vertices. Model predictions are compared with available finite-element (FE) based estimates of limit loads on cubic cells. In addition, a heuristic modification to the model is proposed in the limit case of penny-shape cracks to enable its application to materials failing after limited void growth as well as to situations of shear-induced void closure.