Fisheries Minister Phil Heatley says the merger of the Ministry of Agriculture and Forestry (MAF) with the Ministry of Fisheries will create an agency with greater capacity and capability.
The agencies are to be combined from February 2012.
Mr Heatley says the move will reduce bureaucracy and save millions of dollars a year.
He says Fisheries was separated out from MAF in 1995 in order to deal with the Quota Management System and most of that work has now been done.
The merger has excited Federated Farmers, which says it has been lobbying for a single ministry for primary industries for some time.
President Don Nicolson says the merger reinforces the growing integration of the primary sector, exemplified last year when the fisheries-based Talley's Group moved to take over meat processor AFFCO.
Reservations from seafood body
The Seafood Industry Council is cautious about the move.
The council, which has about 2500 members, shapes policies, lobbies the government, and helps fund research.
Chief executive Peter Bodeker says despite the merger providing some benefits, he has some concerns.
He says at times the Ministry of Fisheries seems under resourced for the job it's required to do, so the council doesn't want to be any staff to lose their jobs because of the merger.
Labour sees no benefit in it
Labour agriculture spokesperson Damien O'Connor says the merger is just tinkering and won't provide any benefits for the primary sector.
He says it's more of a PR stunt than a commitment to deliver better results for the agriculture, forestry and fishing industries, or for the New Zealand economy.
Mr O'Connor says the Government should be helping rural communities, which rely on primary industries, by having a coherent economic plan and creating more jobs.