Hipkins says in a Cabinet paper that he will seek Cabinet approval this month for members and terms of reference for a taskforce to review the system by the end of this year.
The paper gives few clues on what may replace the system, but makes it clear its competitive aspects will be changed.
"Tomorrow's Schools shifted governance to local communities in what was initially a community responsiveness model," Hipkins says in the paper.
"However, in keeping with the opening up of the New Zealand economy at the time, this community responsiveness model then rapidly shifted to a competitive model with schools envisaged as independent businesses competing in a market.
"While this produced some level of diversity of approaches and did strengthen local community influence on schools, the competition was for students rather than improved education results.
"The benefits from this change have run their course and we need to take a fundamental look at the system."
Governance changes will be accompanied by an "education workforce strategy" aimed at overcoming teacher shortages, including "long-term supply solutions for Māori language teachers" and a new Education Advisory Service.
"I also propose to establish a joint taskforce with the teaching profession to reduce the amount of compliance-focused paperwork teachers are required to complete," Hipkins says.
He will also go to Cabinet next month with membership and terms of reference of another working group to review policies for early childhood education, including "investigating the introduction of minimum qualification levels for all home-based educators".
And for tertiary education, the paper says some regional polytechnics "face immediate viability concerns and the sustainability of the sub-sector overall is uncertain".
"I want to ensure that New Zealand has healthy and effective public regional vocational education provision into the future that can meet the labour market demands (current and future) and skill needs (including trades skills) of our regions," Hipkins says.
"This will include consideration of the relationship between ITPs (institutes of technology and polytechnics) and industry training organisations.
"I will report back to Cabinet in March 2018 with an approach to a programme of change for the ITP subsector and for vocational education more generally. A final report back will follow in December 2018."
The performance-based research fund will also be reviewed from August.
The work plan includes an "action plan for learning support" in October this year to support children with disabilities and behaviour issues, and a "comprehensive reform" of school property, also by October.
The work plan does not answer question marks over two big reforms started under the previous National Government: a new school funding system to replace the current socio-economic "deciles", and grouping schools in "communities of learning" to encourage cooperation to raise achievement levels.
Hipkins' paper says: "Further work is required on whether to proceed with the decision made by the previous government to replace the decile system with a new mechanism for targeting funding to support learners from socio-economically disadvantaged backgrounds."
On communities of learning ( Kāhui Ako), it says: "I have asked the ministry to undertake collaborative work with the Investing in Educational Success advisory group during 2018 to make the current Kāhui Ako model more collaborative, more responsive to the needs of local communities and more empowering for educationalists."
The paper also promises a law change this year to the National Government's law enabling "communities of online learning" (Cools).
"There is a place within the education system for online learning, but as the Cool provisions currently stand, the risks outweigh the benefits," Hipkins says.
The Cabinet paper says little about the future of the Education Ministry strategy to boost Māori education, Ka Hikitia, which is due to expire at the end of this year. The paper says the strategy will be "refreshed" with a proposed national Māori education hui this year.
