Culture minister Ed Vaizey has announced that Arts Council England (ACE) is likely to take on responsibilities currently held by the Museums, Libraries and Archives Council (MLA).
A number of the key functions that are currently undertaken by the MLA are to transfer to ACE by the end of March 2012, subject to the approval of its National Council.
If approved, ACE will be responsible for the Renaissance in the Regions initiative; work to develop museums and libraries through accreditation and designation; and statutory cultural property functions.
Additional funding worth more than £46m a year will be provided from 2012-13 to help ACE deliver the work, with £1.3m extra support going directly to the British Museum to co-ordinate the Portable Antiquities Scheme.
Vaizey said: "The Arts Council has an exciting opportunity to integrate the MLA's expertise and bridge some artificial divides between different aspects of cultural funding and get the maximum bang for the taxpayer's buck."
MLA CEO Roy Clare said: "It is a difficult time for MLA staff, but they have shown exemplary professionalism."
ACE chief executive Alan Davey added: "Our discussions with DCMS continue. The work of the MLA is very important and it is necessary to take the time to ensure that any new arrangements will work smoothly and benefit museums and libraries.
"It is also important to ensure that, in assuming additional functions, the Arts Council is given the proper resources to do the best possible job."