"The public service is operating in a fast-changing and unpredictable context where major social, demographic and technology-driven changes are reshaping the world as we know it," Hipkins said.
"When it comes to the really big and complex challenges it doesn't work anymore to put a single agency on the job."
The new law would make public sector chief executives jointly accountable for delivering Government priorities.
For example, the legislation could mean the Ministry of Primary Industries' boss would need to work hand-in-hand with the head of the Ministry for the Environment to deliver on the Government's goal have zero net carbon by 2050.
This can't happen under the current Act.
National's spokesman for State Services Nick Smith said the new law would mean the public sector would be more expensive, less accountable and more centralised under the Government's proposed reforms.
"It will mean more taxpayer money going into Wellington bureaucracy and less into the important front-line public services that New Zealanders use every day."
Hipkins said the shift to a single, unified public service approach would be complemented by cultural change and long-held principles of the public service would be embedded into the new law.
"Principles such as political neutrality, free and frank advice, and merit-based appointments are important. I believe these changes will have a unifying effect on the Public Service.
"They help safeguard the constitutional conventions governing the public service, promote ethical conduct, and enable cross-agency collaboration on services and outcomes for New Zealanders."
The Act will recognise the responsibility of the Public Service - including Crown Agents - to support the Crown to fulfil its responsibilities under Te Tiriti o Waitangi/the Treaty of Waitangi.
"This is another clear signal that we are serious about our commitment to our treaty partners," Chris Hipkins said.
