A new 'super ministry' merging the functions of four public service departments will established on July 1, Government has confirmed.

Economic Development minister Steven Joyce is set to head the Ministry of Business, Innovation and Employment.

It will bring together the functions of the Ministry of Economic Development, Ministry of Science and Innovation, Department of Labour and Department of Building and Housing.

The merger was aimed at opening up new opportunities for business, Mr Joyce said.


"The Government is committed to building a more competitive and productive economy, that will grow more and bigger businesses so that we are better able to afford the sort of society we aspire to.

"Strengthening the leadership and integration of Government policy and activity will help create the conditions for businesses to grow and create jobs. Structure is only one part of the story, but the current fragmented structures make it harder to achieve the results we need."

Hundreds of public service jobs are expected to be erased in the merger - though Mr Joyce said the jobs of the ministers overseeing the various sectors are safe.

State Services Minister Jonathan Coleman said the new ministry would net Government up to $11 million in savings in the medium term.

Most staff would have a seamless transition into their new roles, he said.

"While obtaining savings is not what is driving this change, there will be efficiency benefits.

"It is envisaged that the current separate agencies will form the initial functional units of the new ministry, which will then be further consolidated over time."