It remains to be seen how the arts will fit into this new department and how arts funding and resources will be affected.
But the changes have left the arts community reeling.
'A massive backwards step'
The executive director of the National Association for the Visual Arts Esther Anatolitis told SBS News she was "gobsmacked" at the decision.
"Deliberate choices have been made [here] - value choices, ideological choices. Someone has made the choice to devalue a $111.7 billion [a year] industry," she said.
"We would expect government at the highest level to reflect what makes us who we are and where we see our future as Australians. That makes this step of removing the name of the arts ministry a massive backwards step culturally for Australia."
Source: Maja Baska via visualarts.net.au
"The arts industry over the past few years has been in absolute shock at industry disruption caused by unplanned, unannounced changes to arts policy and funding … The federal government seems intent on the disruption and contraction of the arts industry instead of its flourishing and its growth."
The federal government seems intent on the disruption and contraction of the arts industry
She said the move has "raised the question, are there more cuts to come? Because you generally don't push through these kinds of hasty measures unless you plan to introduce more cuts".
Many others have taken to social media to express their dismay.
'Busting bureaucratic congestion'
The current Department of Communications and the Arts aims to "provide an environment in which all Australians can access and benefit from communications services, creative experiences and culture".
In addition to the arts, the department also deals with Australia's internet and telecommunications industries.
In a statement, Mr Morrison talked up the changes and mergers.
"Having fewer departments will allow us to bust bureaucratic congestion, improve decision-making and ultimately deliver better services for the Australian people," he said.
"The new structure will drive greater collaboration on important policy challenges".
In a press conference about the changes, the PM said, "in [the] area of communications, [we'll get] a strong synergy between what's happening in communications policies, communications, infrastructure delivery and regional Australia".
He did not mention the arts.
Department head blindsided
Current department head Mike Mrdak, who has 32 years of experience in the public sector, will be one of five secretaries to get the axe.
In a memo on Thursday he said, "I was told of the government's decision to abolish the department late yesterday afternoon".
"We were not permitted any opportunity to provide advice on the machinery of government changes, nor were our views ever sought on any proposal to abolish the department or to changes to our structure and operations."
Mr Mrdak said Australia had the best public service in the world.
"Long may it continue to be so."