Australia will have a new Home Affairs department that will combine the domestic spy agency, the federal police and customs and immigration departments into one office.

The new 'super ministry' will be headed by current Immigration Minister Peter Dutton, who will have oversight powers over ASIO, the Australian Federal Police, the Australian Border Force, the Australian Criminal Intelligence Commission and AUSTRAC.

Prime Minister Malcolm Turnbull made the announcement on Tuesday, saying it was a "rational re-ordering" of the departments to respond to national security threats.

"We need these reforms, not because the system is broken, but because our security environment is evolving quickly."

Australia was facing complex and rapidly-evolving security challenges, he said.

"We can't take an 'if it ain't broke, don't fix it' approach to security arrangements," Mr Turnbull said.

"We need more enduring and better integrated arrangements for our domestic and border security."

Attorney-General George Brandis will be responsible for “oversight” of the new ministry with the transfer of independent security monitor agencies and the ombudsman handling public complaints of government departments.

Mr Turnbull described the changes as the most significant reform of the nation's intelligence and domestic security arrangements in more than four decades.

The ministry is modelled on the UK's Home Office but the Prime Minister stressed it would not be like the US Department of Homeland Security.

Mr Turnbull took responsibility for the call, and denied it was made for political reasons.

"This is my decision. These machinery of government decisions are taken by the Prime Minister, obviously, with a lot of consultation with colleagues and others, but they are a decision of the Prime Minister.

"It is not political."

He stressed that the changes would maintain civil liberties and ensure there would be "higher levels of checks and balances" than ever before.

In an interview on ABC TV, Mr Dutton defended the new ministry after he was questioned on whose advice the federal government was making the change.

"Every piece of advice we have received, verbally speaking, with authorities here and internationally wherever possible, agencies should be working as closely as they can."

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What is happening?

A new national security department amalgamating the domestic spy agency, the federal police and customs and immigration departments.

Why is it necessary?

The government says it’s a logical change to respond to new and emerging security risks with the threat of terrorism.

Who gets what powers?

The current Immigration Minister Peter Dutton will be the new Home Affairs Minister.

He will have charge over ASIO, the AFP, Australian Border Force, AUSTRAC and the Office of Transport Security.

The Home Affairs Minister will have two ministers working with him.

Current Justice Minister Michael Keenan will act as the security-focused minister.

Attorney-General George Brandis will be responsible for “oversight” of the new Home Affairs office.

He will have charge of the Inspector-General of Intelligence and Security, the Independent National Security Legislation Monitor and the Commonwealth Ombudsman.

The oversight minister will also retain the powers to issue ASIO warrants and ministerial authorisations for intelligence bodies.