NHS services and councils will be encouraged to work together to provide health and care services under plans to be set out by ministers in England.
The blueprint will overhaul many of the rules put in place by the 2012 Health and Social Care Act.
The requirement for many new services to be tendered will be scrapped.
Ministers believe it will put the NHS in a stronger position to cope with the challenges of an ageing population and rise in people with chronic conditions.
One-in-three patients admitted to hospital as an emergency has five or more health conditions, such as diabetes, obesity and asthma, up from one-in-10 a decade ago.
Those working in the health service said many of the rules in place were time-consuming, frustrating and stressful.
The tendering rule made it complicated for councils and different parts of the NHS to set up joint teams and pooled budgets.
Some had had to set up separate bodies, such as social enterprises, to bid for contracts.
Under the changes, to be set out in full in a white paper on Thursday, councils and NHS services will be able to set up joint integrated bodies that can make decisions about how to join-up services.
Nigel Edwards, of the Nuffield Trust think-tank, said the changes amounted to “re-wiring behind the dashboard” and should not be too noticeable to patients.
He said they should not be seen as the “magic bullet”, but he said it could help different parts of the system working more closely together.
Analysis: Why is that important?
The ageing population requires different services to work hand-in-hand, sharing expertise and staff to make sure people get the joined-up care they need.
If that sounds like NHS-speak, let’s take a typical patient with whom the NHS deals. She is in her 70s, has heart disease, the early stages of dementia and lives alone.
She needs regular contact with her heart specialist, support from community nurses and, ideally, some company from befriending services which are run by the voluntary sector with support from councils.
If she needs to go into hospital – perhaps after a fall – in an ideal world she will be treated quickly and then the hospital staff will be in touch with community services to arrange the support to allow her to come home.
In a world where budgets are linked to individual services, where different organisations are encouraged to compete and tender for work, the pooling of resources and staff is not so easy.
The white paper will cite examples of good practice that have been established in spite of the rules, such as the integrated care team at the Royal Derby Hospital which sees nurses from the community, council care services and the hospital staff working together to plan the discharge of patients from hospital.
Health Secretary Matt Hancock said: “The NHS and local government have long been calling for better integration and less burdensome bureaucracy – and the pandemic has made clear the time for change is now.”
NHS England chief executive Sir Simon Stevens said it will create a “flexible can-do spirit” across the health and care system.
Chris Hopson, of NHS Providers, which represents NHS managers, agreed, saying it will end “an unnecessarily rigid NHS approach to procurement”.
The Local Government Association also welcomed the plans, but said they did not provide the funding to put care services on a “sustainable and long-term footing” that was needed.
Shadow health secretary Jonathan Ashworth questioned the timing of the reorganisation in the midst of the pandemic.
He said ministers needed to point out how this would helped the growing numbers of people facing long waits for treatment and ease the pressure on services that were “stretched to their limits”.