A new federal super-ministry of Home Affairs will be set up including the Australian Federal Police, ASIO and the Australian Border Force.
Prime Minister Malcolm Turnbull has announced it will be headed by the current Immigration Minister Peter Dutton.
It is a dramatic reorganisation of the ministry, stripping the Australian Security Intelligence Organisation from the Attorney-General and taking the Federal Police away from the Justice Minister.
Mr Turnbull says it is the most "significant reform of Australia's national intelligence and domestic security arrangements and their oversight in more than 40 years".
There will be an office of national intelligence that will play a co-ordination role. Mr Turnbull said all of Australia's closest allies have similar offices.
Cyber-security will be beefed up with a new centre that operates around the clock.
The idea has been controversial because it gives so much power to one minister, but Mr Turnbull defended the move saying: "We can't take an 'if it ain't broke don't fix it approach'."
The changes will take a year to implement and are expected to be finalised by the end of June next year.
More to come.