Under the changes orchestrated by Gov. Jerry Brown last year, the number of state agencies will be reduced from 12 to 10, with departments that have related functions housed together.
The reconfigured Transportation Agency now will include the Department of Motor Vehicles, California Highway Patrol, CalTrans and the California High-Speed Rail Authority. A new Government Operations Agency will centralize contracting, technology and human resource functions that had been scattered throughout state government.
Businesses and professionals who are licensed by the state will be overseen by the new Business, Consumer Services and Housing Agency, which consolidates two current agencies.
Brown has said the changes will streamline government and could save money in the long run.
"This far-reaching plan will make government more effective and will reduce wasteful spending," the Democratic governor said in a statement after the plan was authorized last July.
The yearlong gap between approval and implementation gave agencies time to prepare for their new arrangements.
The reorganization was approved by the independent Little Hoover Commission, which described it as the most ambitious of the 36 reorganization plans reviewed by the panel.
Former Gov. Arnold Schwarzenegger promised in his first State of the State address in 2004 to "blow up the boxes" of state government, ordering a study that recommended the largest government reorganization since the 1960s.
That performance review proposed consolidating 11 agencies and 79 departments into 11 major departments while eliminating 12,000 state jobs. It also recommended eliminating 117 boards and commissions.
Most of those proposed changes never happened. By the time Schwarzenegger left office in 2011, his administration said 34 boards and commissions had been eliminated or consolidated during his tenure, although not all were a result of his efforts.
Lawmakers were not required to approve Brown's plan, although they could have halted it if one chamber voted to reject the reorganization. The Legislature did approve several bills tweaking the governor's changes, which go into effect Monday.
Most state legislation takes effect on Jan. 1, although provisions in a handful of other bills also take effect Monday. Among them are bills that will increase the amount of wages exempt from garnishment and require passengers in recreational off-road vehicles to sit in manufacturer-provided seats.