The Federal Indigenous Affairs Minister has formally advised Indigenous organisations of the Government's plans to abolish ATSIC.

In her letter, Amanda Vanstone also reveals more details of what would replace the commission.

Senator Vanstone's letter confirms the Government will funnel current funding into other departments and appoint a new national Indigenous advisory council.

The Minister also reveals plans for new Indigenous coordination centres in rural and remote areas to coordinate programs and aid service delivery.

Labor's Indigenous Affairs spokesman, Kerry O'Brien, has accused the Government of pinching Labor's ideas.

"The Government's started to follow our path, but they haven't gone far enough in involving the communities, who are the ones who can make this system work," he said.

ATSIC's Terry O'Shane is not impressed with the idea of new centres.

"I fail to understand then why they need to replace the existing arrangement with the regional councils and the regional offices," he said.

But he hopes the changeover could save local jobs and ensure valuable corporate knowledge is not lost.