The government will create a new entity responsible for running the system that looks after children in care - a system Social Development Minister Anne Tolley says is "broken".
Ms Tolley has just released the final report of a major review of Child Youth and Family (CYF).
And she said the new plan could mean a restructure for the Ministry of Social Development and CYF, but those decisions had not yet been made.
The new model could also result in significant amounts of funding being stripped from existing agencies.
Ms Tolley said it was very clear the current system was not working.
"The life outcomes for children in care are absolutely abysmal."
Last September the minister released an interim report by an expert panel led by former Commerce Commission chair Paula Rebstock, which was used for the review of the system announced today.
Releasing the final report she said the government was bringing services together to a single point of accountability.
"The system is very fragmented, it's across agencies, the funding and provision of service etc.
"We're going to bring all of that together into the one area, one new operating system that will be in place from the end of March next year."
Mrs Tolley said it would be child-centred.
"We are setting up the very first advocacy organisation for youth and the legislation will make provision for that advocacy and their rights to, if you like, enunciate their expectations of the system for them."
She said this marked a move from a "short term, harm minimisation, crisis management system to one that has high aspirations to one that is long term and looking at the long term well-being of children."
There were 81 recommendations from the panel and Mrs Tolley said she had not asked Cabinet to address all of them.
Ms Tolley said discussions about the structure of the Ministry and Social Development and CYF as the lead agencies in this area were still going on.
The government was already considering the age at which children and young people exit the system, and that could be up to the age of 25, depending on their circumstances, she said.
In the meantime, the law would be changed later this year to raise the current age from 17 to 18.
Ms Tolley said having a single agency would avoid a case such as a child she was talking to yesterday who had had 13 different placements and worked with five or six different agencies.
"And we lost track of them in the system so if they're in the CYF system we know what's happening to them but the minute they leave and they go off CYF books, and even with a partnership NGO [non-governmental organisation] they disappear off CYF books and we don't know about them until they come back in again.
"And what the panel found was that these kids come back in three, four times before CYF take action, typically."
Mrs Tolley said the new entity would also be the sole purchaser of services including medical, psychological and hiring social workers.
"A key part of this is being able to purchase, direct purchase, so that the funding follows the child".
But Mrs Tolley said this would not be a voucher model, rather more closely based on the Accident Compensation Corporation model, where needs are assessed and the funding follows.
"When you talk to CYF people at the moment, and NGOs, and we're finding it through the children's' teams, they spend half their time negotiating with the different agencies who have different criteria about what meets needs for services.
"And so what the panel is saying, is in order to get timely intervention you need to be able to purchase those services straight away for that child when they need them."
Mrs Tolley said under this model, the role of community groups and NGOs would grow significantly.
Data analysis and actuarial valuations would guide the new agency as to which families needed the greatest degree of help, and there would a significant range of options, from basic support to the removal of a child from a family.
Funding, which ranged into the hundreds of millions, could be taken from existing agencies and put towards the new entity and direct purchasing, but Cabinet would still have to consider all of that before making any decisions, Ms Tolley said.
On top of that, there would "absolutely" be some new money allocated.
Mrs Tolley said the work on funding would be done this year, and more specific details would be included in next year's Budget.
'Devil in the details'
The Labour Party said while there are some very good initiatives in today's proposed overhaul of CYF, it said the changes must be resourced properly.
Labour's children's spokesperson Jacinda Ardern said there was not much detail in today's announcement.
"Really pleased to see that the panel has recommended that we have one consolidated agency working on child wellbeing issues. at the moment it is cut across education, health, justice and police - that's the reason we've long advocated for a children's ministry, and that's what I hope the government will eventually create."
Ms Ardern said Labour was concerned about where the funding for the new entity would come from, and said other government services should not suffer.
The government's announcement that the age of state care would be lifted from 17 to 18 this year was particularly welcome.
"Alongside groups like Lifewise and the Dingwall Trust, we have campaigned for this change for years and are delighted the panel has taken that on board.
"However, it should have gone hand in hand with raising the age of juvenile court jurisdiction."
The Green Party said the overhaul had the potential to improve outcomes for vulnerable children.
Co-leader Metiria Turei said evidence showed engagement with CYF increased the risk of adverse outcomes for children and the concept of the new entity being child-centred was good.
But Ms Turei said the devil was in the detail and the Greens wanted more information about the new entity.
"There is a recommendation it become its own department, it entirely depends on what the responsibilities of that department are," she said.
"And if it becomes a funding agency like ACC, which is one of the suggestions, then I've got real concerns about the commitment of that agency to the well-being of children and making sure children are at the centre of its work."
The Children's Commissioner said he hoped the proposed changes to child welfare would mean children got services when they needed them.
Russell Wills said the plan for a new agency which would directly purchase services from other government departments or outside agencies was great news.
"Currently CYF social workers have to bargain and almost beg to get the services these kids and their families need. So I think that's really important."
Dr Wills said the proposals would succeed only if the government invested new money, and listened to the feedback from children in care themselves.