Council mergers: Queanbeyan City Council to merge with a partitioned Palerang under Fit for the Future reforms

Palerang Council however, will be disbanded and the area split between Queanbeyan and Goulbourn-Mulwaree under NSW government plans to turn 109 regional councils into 87.

Briefing mayors on Friday morning, Premier Mike Baird said he understood that change was never easy, but the government considered there were significant benefits to be had from larger councils.

Goulburn Mayor Geoff Kettle, whose council stands to survive in the mergers, called the reforms "very, very, soft" and believed his region would benefit little economically by assuming eastern Palerang.

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"The state government will find itself in a position in a few years where they'll have to do it all again. They had the opportunity to do it once and do it right," he said.

He said Goulburn Mulwaree would have liked more of Palerang's growth areas, such as Bungendore, and would be speaking to Queanbeyan about opportunities to "give and take".

Queanbeyan Mayor Tim Overall moved to assure residents that consultations were ongoing and they would have an opportunity to comment on the proposal.

But he said mergers across the state were "inevitable".

"This is not a surprising step forward in the local government reform process."

Under the proposal to merge Queanbeyan and Palerang the new council would be given $15 million, $5 million for "transitional" costs and $10 million for community infrastructure, he said.

Goulburn-Mulwaree Council will merge with the northern end of Palerang and Queanbeyan City Council would be forced to merge with the southern area.

Queanbeyan would encompass Palerang localities including Hoskinstown, Majors Creek and Araluen.

Cooma-Monaro, Snowy River and Bombala would become one council, but Yass and Eurobodalla councils would stay untouched by the proposed mergers.

While Queanbeyan City councillors voted against a full merger with Palerang earlier this year, councillors maintained they would be open to accepting part of the Palerang council area.

Local Government Minister Paul Toole said it was an "historic day".

"This is about some of the biggest changes we have seen in 100 years. It's about putting communities and infrastructure first," he said.

Mr Baird said it was likely that council elections would need to be moved from September 2016 to March 2017, although the government was still aiming for the earlier date.

Sydney's councils would be reduced from 43 to 25 under the proposed mergers.

Cr Overall said it was "business as usual" until the plans had been finalised next year.