A directorate is being set up within the Department of Trade and Industry to encourage stronger links between the research community and industry.
Trade and industry secretary Patricia Hewitt was expected to tell Parliament by the end of the week that the new group would focus on maximising the return on the government's investment in science.
It will boost the department's technology transfer and innovation programmes, currently overseen by the Office of Science and Technology, and make it simpler for external bodies to participate.
The DTI will recruit a director-general of science, technology and innovation to head the organisation and should have its structure fixed by the end of the year.
The future of the OST has been subject to rumours of a possible shift back to the Cabinet Office, where it spent the first three years of its existence. A DTI spokesman insisted such a move was not being considered.
While budget details of the directorate and the OST - which spends £1.8 billion a year - had yet to be decided, he insisted support for pure science would not suffer.
"We're looking to put science and technology very much at the heart of the department," he said.
John Taylor, director-general of the research councils, and David King, the chief scientific adviser, will retain their links with the OST.
Ian Gibson MP, chairman of the House of Commons science and technology select committee, said the committee may investigate the future role of the OST.