Attorney-General Mark Dreyfus has announced the government will abolish the controversial Administrative Appeals Tribunal, which reviews a range of federal decisions including those on migrant and refugee visas.
The new body is expected to be operating by the end of next year.
Matters currently before the tribunal will be unaffected.
What will the new body look like?
Mr Dreyfus said the government wanted to ensure appointments were merit-based and appropriately qualified.
He said the decision to scrap the AAT came as a result of long consideration and the government was proposing to appoint about 75 additional members to deal with backlog.
When asked if people who had associations with the former coalition government would be barred from being appointed, Mr Dreyfus said the process would be based on merit.
On Labor-connected appointments, Mr Dreyfus said a set of criteria would be applied for every individual considered for a role.
He said a task force led by former High Court judge Patrick Keane would consult on the design of the new body and legislation would be introduced next year.