The government is merging most functions of the Department of Climate Change and Energy Efficiency with the Department of Industry, with the merged bodies becoming the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education.

The 740 staff at Climate Change are housed in the building boasting a ''six green-star, energy-efficient'' design, at a cost of $10 million a year.

The opposition had previously vowed to abolish the department if it won the federal election.

The Minister for Climate Change, Industry and Innovation Greg Combet was asked on Monday to indicate what would happen to the space leased by Climate Change.

His spokesman said accommodation arrangements were a matter for departmental management.

''This and a range of other issues will be considered in the coming days,'' the spokesman said.

Later he added: ''There are no plans to move climate change policy staff out of the Nishi building.''

Opposition climate action spokesman Greg Hunt said earlier this month a Coalition government might sack staff from Climate Change if they refused to take redundancies.

The surplus office space in the Nishi building could be sub-let or the Coalition might cancel the department's 15-year, $158 million lease.

In a statement justifying the merger of the departments, Mr Combet said a significant number of Climate Change Department staff moved to the Clean Energy Regulator when it was established last year.

''The detailed policy design work and legislation for the carbon price has now been completed and the carbon price is being implemented successfully,'' he said.

''The government has also established the Climate Commission as an independent and reliable source of information about the science of climate change, the Climate Change Authority to advise on emissions targets and the Clean Energy Regulator to administer the carbon price.

''Accordingly, the government has decided that a separate department is no longer required for this policy work,'' he said.