The service is currently situated within the lifelong learning department at Leicester City Council, alongside children and adult learning. But under the changes, children, youth and adult services will be separated.
Paul Vaughan, head of youth services at the council, said: "The present situation means we have 26 youth workers line-managed by 18 managers, who also oversee other services. This doesn't meet the requirements to deliver high-quality youth work in terms of the Transforming Youth Work agenda, so I am proposing a federal arrangement where children, young people and adults are managed discretely."
Leicester Youth Service received a 22 per cent increase in its 2004-05 budget as part of the Resourcing Excellent Youth Services objectives.
The proposals will mean an overall reduction in staffing across the department, except for the youth service.
Changes in youth worker job descriptions will lead to the introduction of a range of new posts, including a quality assurance and staff development officer, a curriculum development and accreditation worker, and a training and development worker, as part of a move towards a JNC pay scale.
But Gary Garner, branch secretary of the public sector union Unison, expressed members' concerns about the proposals.
"We are in dispute with the authority as we feel there is no basis for change," he said. "There were concerns raised by staff over the introduction of JNC terms and conditions, which we are questioning with managers."