Federal Government departments will be dismantled and top leaders dismissed as part of a major shake-up of the public sector.

Key points: Five heads of departments will lose their jobs as Scott Morrison overhauls the public sector

Five heads of departments will lose their jobs as Scott Morrison overhauls the public sector The Prime Minister will merge some departments and cut the overall number from 18 to 14

The Prime Minister will merge some departments and cut the overall number from 18 to 14 He insists the changes are to better deliver services rather than cut costs

Prime Minister Scott Morrison has moved to stamp his authority on the bureaucracy, with the number of departments cut from 18 to 14.

The overhaul will see the merger of some departments — including the Department of Agriculture and Water Resources with the Department of Environment — in a move Mr Morrison insists will cut bureaucratic red tape and lead to better services.

The ABC earlier on Thursday revealed the bureaucracy, particularly within the Department of Agriculture and Water Resources, was braced for an overhaul.

Mr Morrison said five heads of departments would lose their jobs in the changes, which take effect on February 1.

He said there would be no changes to his ministry.

Which departments are merging?

The changes include the creation of:

The Department of Education, Skills and Employment: a merger of the Department of Education and Department of Employment, Skills, Small and Family Business.

The Department of Education, Skills and Employment: a merger of the Department of Education and Department of Employment, Skills, Small and Family Business. The Department of Agriculture, Water and the Environment: a merger of the Department of Agriculture and environment functions from the Department of the Environment and Energy.

The Department of Agriculture, Water and the Environment: a merger of the Department of Agriculture and environment functions from the Department of the Environment and Energy. The Department of Industry, Science, Energy and Resources: a merger of the Department of Industry, Innovation and Science, energy functions from the Department of the Environment and Energy and small business functions from the Department of Employment, Skills, Small and Family Business.

The Department of Industry, Science, Energy and Resources: a merger of the Department of Industry, Innovation and Science, energy functions from the Department of the Environment and Energy and small business functions from the Department of Employment, Skills, Small and Family Business. The Department of Infrastructure, Transport, Regional Development and Communications: a merger of the Department of Infrastructure, Transport, Cities and Regional Development and Department of Communications and the Arts.

The Department of Infrastructure, Transport, Regional Development and Communications: a merger of the Department of Infrastructure, Transport, Cities and Regional Development and Department of Communications and the Arts. The Department known as Services Australia, formerly Human Services, will be established as a new executive agency within the Social Services Department.

Ten departments will remain untouched.

"Having fewer departments will allow us to bust bureaucratic congestion, improve decision making and ultimately deliver better services for the Australian people," Mr Morrison said.

But CPSU national secretary Melissa Donnelly said the creation of "super departments" would not increase efficiency.

"The experiences in the [Australian Public Service], where there has been the creation of a super department with the Department of Home Affairs, has been negative, in terms of people's staff experience and the service delivery in that agency has been affected," he said.

Prime Minister Scott Morrison believes the mergers will improve the public service. ( ABC News: Mark Moore )

Will staff be losing their jobs?

Secretaries Daryl Quinlivan (Agriculture and Water Resources), Kerri Hartland (Employment and Skills), Renee Leon (Human Services), Mike Mrdak (Communications) and Heather Smith (Industry) will be out of jobs by February 1.

The Prime Minister insisted the changes were not designed to cut costs.

The ABC earlier on Thursday revealed Mr Morrison intervened at the 11th hour to block more than 100 water staff from the Department of Agriculture and Water Resources who were slated to be relocated to the Department of Infrastructure.

Senior officials were largely in the dark over the overhaul and there are reports secretaries didn't get the chance to provide advice on the proposal.

Staff at the departments being merged are expected to retain their positions.

However, Mr Morrison has flagged further changes could be announced as early as next week.

Sacked public servant returns

Mr Morrison chuckled when he announced Andrew Metcalfe would return to the public service as the new head of the Department of Agriculture, Water and Environment.

Mr Metcalfe was previously the boss of the Department of Agriculture but lost his job when the Coalition came to power in 2013.

"Since then, he has been a partner at EY. He will bring considerable public policy leadership experience to the Department of Agriculture, Water and the Environment and to the secretaries board," the Prime Minister said.

Mr Metcalfe's relationship with the Prime Minister dates back to his time as the boss of the Department of Immigration from 2005 to 2013, during which Mr Morrison served as the Opposition's immigration spokesman.

When he lost his job in 2013, Labor alleged it was because of his tenure at the Immigration Department.

Government sources the ABC has spoken with have said he was well placed to return to lead the new department at a time when drought continued to ravage the country.

"I am very much looking forward to working with ministers on these very important issues," Mr Metcalfe told the ABC.

Flood agency overhaul

As part of the restructure, Mr Morrison has expanded the North Queensland Livestock Flood Recovery Agency led by Shane Stone.

It will become a national agency, providing assistance to those dealing with drought, as well as recovering from the Queensland floods.

"It's been one of our challenges in the drought," Mr Morrison said.

"A number of times when I've spoken to people in communities and they've said 'I wasn’t aware that that program was in place, I wasn’t aware that you’d increased the funding for that program'.

"And what Shane and his team have been able to do in Queensland, I want to see them do across the drought-affected parts of this country."

The new National Drought and North Queensland Flood Response and Recovery Agency, will sit within the Department of Prime Minister and Cabinet and report to Drought Minister David Littleproud.