The NSA said the reorganization, known as "NSA21," or NSA in the 21st century, will take two years to complete, well into the first term of whoever is elected president in November.
A review board appointed by President Barack Obama recommended in December 2013 that the NSA concentrate solely on foreign intelligence gathering. The board's recommendations came as the United States was reeling from disclosures from former NSA contractor Edward Snowden about the collection of vast amounts of domestic and international communications data.
Under the board's plan, a separate agency would have been housed within the Department of Defense with responsibility for enhancing the security of government networks and assisting corporate computer systems.
Ignoring that recommendation, the Obama administration will replace its separate spying and cyber-defense directorates with a unified organization responsible for both espionage and helping defend US computer networks.
The "new structure will enable us to consolidate capabilities and talents to ensure that we're using all of our resources to maximum effect to accomplish our mission," NSA Director Mike Rogers said in a workforce address made publicly available on Monday.
Some technology specialists and privacy advocates have said the government agency responsible for building and exploiting flaws in computer software for spying purposes should not be the same one entrusted to warn companies about detected software weaknesses.
The presidential panel cited concerns about "potential conflicts of interest" between the NSA's offensive and defensive objectives, in addition to the need to restore confidence with the US technology industry to induce better cyber-security collaboration.
"I hope the NSA will explain its strategy for continuing to rebuild trust with the private sector," Peter Swire, a professor of law at the Georgia Institute of Technology, who served on the five-member review group, said on Monday.
In November, the NSA told Reuters it informed US technology firms more than 90 percent of the time about serious software flaws it found. The spy agency did not say how quickly it alerted those firms, leaving open the possibility it exploits software vulnerabilities before sharing details about them.
© Thomson Reuters 2016