Education minister Huw Lewis said that having given councils “plenty of time to get their act together” he was now taking action.
In April education expert Robert Hill, a former advisor to Tony Blair, submitted a report to the Welsh government suggesting a major change to the way education services were organised with a view to driving up standards.
The report suggested that four regional consortia in Wales should cover a standard set of key functions, should be directed from a board and should attend a twice-yearly stock-take with the minister.
Mr Lewis has now said he is minded to fund the four regional bodies directly, with money taken out of council grants from the beginning of the next financial year.
Announcing the change, Mr Lewis said he was not satisfied with progress made by local education authorities.
He added: “Decisive action needs to be taken now in order to support our schools and young people.”
The decision comes after a series of critical inspection reports by Estyn on the performance of local authorities in Wales. Nearly one quarter of council education services are or have been in special measures while none of the 20 councils recently inspected were deemed excellent.
Some opposition politicians branded the move a sticking plaster for a failing system, however teaching unions in general have welcomed the action.
Dr Philip Dixon, director of ATL Cymru, said: “The new minister is moving us in the right direction with this announcement. Too many local authorities are now too small to fulfil many of their key functions adequately. In this context bigger will be better.
“On the ground, teachers will not really care how the deckchairs are arranged. They will want to see for themselves that things are getting better in terms of the support and help they can count on to do their essential task. That will be the acid test of all these changes.”