The DVLA says that motorists will benefit from a better, quicker service after Roads Minister Mike Penning gave the go-ahead for wide-ranging reforms to improve how the Agency works.
Key to the improvements is centralising the DVLA's services and making more transactions available online
This transformation of the DVLA's services will result in around £26 million year on year saving for the taxpayer.
The announcement means that the DVLA's 39 regional offices will close. It is hoped that some of the staff will be able to re-locate to the head office in Swansea.
No offices will close until late next year when alternative services will be available either through its contract for front office counter services, online or directly from Swansea. DVLA will now work to help affected staff as a matter of priority.
Penning said: "The DVLA has been serving motorists for more than 40 years but times and customers' needs change. That is why the agency continues to transform its services to give customers more choice and flexibility while offering best value for money for the taxpayer.
"These changes - developed after carefully listening to views expressed at consultation - will ensure that the agency delivers a smarter service to bring real benefits for the motor industry and every motorist in this country.
"I understand that the phased closure of the regional offices will come as a disappointment to those directly affected. I would like to thank the staff in these offices who have played an important part in DVLA service delivery over the years."
However, the Freight Transport Association (FTA) predicts slower and more costly services for its members as a result of the changes.
It says that local DVLA offices have always played a significant part in the running of the day-to-day business of fleets; from tax discs to digital tachograph services, and if the proposed intermediaries are not geared up to handle bulk business sector enquiries, everything will now to be dealt with by post.
On announcement of the proposed closures, concerns were raised by FTA members who pointed out that several DVLA services, including the taxation of a vehicle with a Reduced Pollution Certificates were not available on line, leaving the local office as the only option.
As a result, the Association had called on the DVLA to increase its online services, including that they develop a system where business users were able to log on and manage their own accounts allowing them to enter multiple entries, to introduce a licence checking service free to the user and importantly only pay once for the transactions being carried out.
Ian Gallagher, FTA policy manager for Driver Licence and Vehicles Registration said: "Now that the Minister has confirmed that the DVLA local offices will close in 2013 the Agency has now got to deliver an alternative which is fit for purpose and benefit business, we see this as being a radical improvement to the Agencies online systems, and a payment structure which is recognised by business and not complicated by Treasury rules.
"FTA members are keen to work with the agency to ensure that the end product has maximum industry input. What we won't accept is a system simply geared towards certain sectors, resulting in additional burden with our membership having to pay thousands of pounds in additional administrative cost."