Hospitals are to be moved out of the NHS to create an industry of social enterprises under the proposals.
And, as expected, GPs are to take charge of much of the budget.
The move will lead to the abolition of all 10 strategic health authorities and the 152 management bodies known as primary care trusts.
The new structure will be held accountable by an independent NHS board which would be free from political interference, the government said.
Meanwhile, responsibility for public health will be passed to local authorities.
In many ways, the plans outlined in a White Paper go further than expected. The coalition agreement had promised no top-down reorganisations.
But Health Secretary Andrew Lansley said he had decided to go further than first envisaged to rid the health service of "unnecessary" bureaucracy.
He said the proposals would be challenging and turn the NHS "upside down" but in doing so help reduce management costs by nearly a half within four years.
He added: "The government's ambition is for health outcomes - and quality services - that are among the best in the world."
Read the full story at: http://news.bbc.co.uk/1/hi/health/10557996.stm
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