"I have decided to merge DFID with the Foreign and Commonwealth Office to create a new department - the Foreign, Commonwealth and Development Office," Johnson said at the parliament.
"The foreign secretary will be empowered to decide which countries receive or cease to receive British aid while delivering a single UK strategy for each country overseen by the national security council which I chair," Johnson said.
The two departments have already seen several merges in their history.
The Department for International Development (DFID) as it's known now was opened under Harold Wilson's Labour government in 1964 as the Ministry of Overseas Development (ODM).
It was re-merged with the Foreign Office again after the election of Conservative Prime Minister Margaret Thatcher in 1979.
The current department was again carved out of the Foreign Office in 1997 under Labour after the election victory of Tony Blair, with the new name Department for International Development.