The service will launch in September next year leaving Connexions facing an uncertain future.
A Department for Business, Innovation and Skills spokeswoman said that from next September councils "will no longer be expected to make available a universal careers advice and guidance offer to young people".
But she added that councils will be expected to offer a targeted careers guidance service for vulnerable young people, although authorities will not be required to use the Connexions brand.
Paul Chubb, director of Careers England, has called on the government to ensure that careers guidance professionals are properly consulted before details of the new service are decided.
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