Careers New Zealand will be scrapped with its career advice role folded into the Tertiary Education Commission.
Legislation to disestablish the Crown entity is expected to pass early next year.
Initially, 121 Careers NZ staff (all employees, except chief executive Keith Marshall) will be transferred to the TEC, but there is less certainty in the long-term.
"The TEC will then work through a transition process to align its resources, including staffing, to its new business functions," a press release outlining the changes states.
Resources currently provided by Careers NZ to support schools are to be transferred to the schooling sector.
The TEC will then focus on providing careers information and helping people move from education to employment.
In announcing the change, Minister for Tertiary Education, Skills and Employment Steven Joyce and Education Minister Hekia Parata said funding for careers advice would continue at the same level.
The Careers NZ brand would also continue.
"We want students to make informed decisions about their future career, so they can set themselves up with a job and a future they're passionate about, while at the same time providing skills where they're needed," Mr Joyce said.
Today's announcement comes after the Ministry of Education began a review of Careers NZ in November 2014. That review was later widened to look at the careers system as a whole.