A new passenger transport authority is to be set up which will change the way in which train and bus services are delivered, the government has said.
Major changes are under way in how public transport is provided
Under the arrangements, Translink will continue to be the main provider of public transport.
However, private operators will find it easier to become involved.
Minister David Cairns said the government has pledged to spend £400m on upgrading services over a three-year period.
"We are about to create seven new councils across Northern Ireland, we want them to have more powers and more say in the lives of the people they represent," he said.
"We are now going to create a Passenger Transport Authority, made up of representatives from those local authorities, who are going to have much, much greater say in how local transport is designed in their local areas across Northern Ireland."
Mr Cairns said the government was opening up the possibility for more competition to enter into the transport provision in NI so that the travelling public could have more choice.
"Translink will continue to be the main providers of public transport services.
"However, the arrangement will make it easier for private sector operators to become involved in the provision of public transport services."
Translink will continue to be the main provider of public transport
The £400m pledged by the government will fund the purchase of new buses and trains and improve the quality of public transport infrastructure.
Julian Hine, Professor of Transport at the University of Ulster, said that under the new arrangements, Translink would operate "at more of an arm's length".
"It won't be responsible for having an oversight role of public transport, this will move to the new Passenger Transport Authority (PTA)," he said.
"The new local authorities which will come into play will have a say in how the Passenger Transport Authority is taken forward."
Professor Hine said public transport decisions would be much more publically accountable than in the past.
He said the PTA was well-known in the rest of the United Kingdom.
"One of the problems that they need to think about is how they are going to allocate revenue support," he said.
"Some communities might require a subsidised service more than others, one of the problems in the past is that he who shouts the loudest actually gets that support."
The Consumer Council said it welcomed the plans and that passengers "have stated loud and clear that they want responsive, quality, value for money public transport".
Chief Executive Eleanor Gill said: "The government has consulted closely with the Consumer Council and other key stakeholders on the vital issue of how we modernise the planning and delivery of public transport services here to ensure that they are efficient, effective and accountable to the paying public."