The Assets Recovery Agency, set up to take money from criminals as part of a government drive against organised crime, is to be abolished.
Assets worth almost £16m were frozen last year
The Home Office announced on Thursday that ARA will merge with the Serious Organised Crime Agency (SOCA).
Government sources insist that while the ARA will cease to exist in name, its work and investigations will continue.
The ARA has been operating in London and Belfast for almost four years.
Last year it froze assets belonging to Northern Ireland criminals worth almost £16m.
But it was also revealed that the agency had recovered only £8m from criminals - despite costing £60m to set up.
Transfer of functions
It is regarded as a success story but will not be operating for much longer.
SOCA was set up last year to tackle drug trafficking and other major crime.
The organisation will take over the assets recovery functions and additional powers to seize money is being extended to prosecutors.
It is unclear what will happen to the 50 staff who work in the agency's Belfast office.
However the Northern Ireland Office has been given assurances that there will be no reduction in the resources dedicated to tackling organised crime.
SOCA will have a designated officer responsible for asset recovery work in Northern Ireland, the Home Office said.
The abolition of the body is in line with the government's desire to simplify and streamline the work done by law and order agencies.
It is thought the transfer of functions to SOCA will not affect ongoing investigations.
The agency's director, Jane Earl, will step down in April, but this is understood to be unrelated to the decision to close the agency.