Children's TV will move to Manchester
The BBC is to undergo a shake-up involving almost 3,000 job losses so more of the licence fee can go into programmes, saving £320m a year.
Several departments will also move from London to Manchester. What do the changes all mean?
Why is the BBC doing this now?
The BBC is seeking to renew its Royal Charter in 2007. The charter sets out the BBC's role, structure and funding.
BBC director general Mark Thompson wants the BBC to be "in good shape" to be able to win charter renewal.
He says the licence fee will only survive as the main method of funding the BBC if the public is convinced that the corporation is spending money wisely.
The future of the BBC in the digital age also has to be addressed now, says Mr Thompson - he wants to transform the BBC into a state-of-the-art digital broadcaster.
He says the investment needed to help build digital Britain "will run in the many hundreds of millions of pounds".
The announcements are the result of four internal reviews that Mr Thompson ordered in June after joining the BBC, and are based on issues like cost savings and programme production.
Will I see more repeats as a result of the cuts?
No. The plan is to show fewer peak time repeats on BBC One and less derivative programming.
"Audiences want us to raise our game," says Mr Thompson.
The BBC has pledged to spend a higher proportion of the licence fee on content than at any other time in its history.
Money saved by making the licence fee go further will allow more funds to be invested in programme-making.
Investment will go into original drama, BBC Four, music, current affairs and sporting events, to name but a few areas.
More programmes will be produced by independent programme makers outside the BBC - one quarter will now have to be commissioned from independent producers.
The number of hours allocated to independent radio productions will increase by 3,100 hours and programme commissions from outside London will increase by 50%.
New local services will be established across the country, particularly local TV.
Will the licence fee be cheaper if the BBC is saving all this money?
This is unlikely. The plan is for more of the licence fee to go directly into programmes.
"Any future discussion about the future level of the licence fee is bound to begin by asking how much of the future we can afford to pay for ourselves by becoming more efficient," says Mr Thompson.
Again, the BBC has to meet the expense of helping the UK to switch over to digital - depending on how much responsibility the government places on the corporation.
A recent report on the BBC's remit as part of the consultation on charter review, headed up by Lord Burns, gave general support for the continuation of the licence fee for the next few years.
But following the nation's digital switch-over - scheduled for completion by 2012 - arguments for replacing the licence fee would become stronger, said Lord Burns.
Does the Hutton inquiry have anything to do with these cuts?
The BBC made several operational changes after the Hutton Report, improving training and complaints procedures.
These changes are separate.
Mr Thompson has repeatedly said the BBC is in excellent shape but he wants to improve it further.
He says News and Current Affairs has a "commanding reputation" and has earmarked investment for original journalism, news gathering and current affairs on BBC One and Panorama.
He also wants to enhance the BBC's presence in the Middle East and across the Islamic world.
MIght there be a threat of strikes affecting programmes?
Union leaders have said they will fight any moves to force workers to leave the corporation or relocate against their will.
Broadcasting workers' union Bectu warned they would "ballot for industrial action" if any of the redundancies were compulsory.
The National Union of Journalists said its BBC members would take action if necessary to save their jobs.
Will there be a sudden flood of TV and radio shows based in the North?
The main idea behind the move to Manchester is to reflect audiences in parts of the country which feel under-represented by the BBC.
The Manchester base will be used to attract talent from across the North so you may hear a few more regional accents on your TV or radio.
But it is not just Manchester and its environs that stand to gain - the BBC wants to increase "cultural representation around the country", particularly in drama.
Commissioning in the regions will increase and there will be new local services across the UK - particularly local TV.
Will any parts of the BBC be sold off?
Yes. BBC Broadcast will be sold and the corporation will be inviting bids for the company in the new year. The sale could take nine months to a year.
BBC Resources is under review and could be sold off at a future date or become a joint venture, where two or more companies run a business as a separate entity.
BBC Worldwide will not be sold.