The house passed a resolution at an ongoing session that will take effect on January 1 next year and be implemented within six months.

With the district and ward people’s councils gone, the city People’s Council will decide their budgets.

Ward and district people’s committees, their government, will be responsible for approving their public investment plans and socio-economic development tasks.

HCMC has a population of 13 million in an area of over 2,000 square kilometers.

The nation's largest industrial and services hub has been the country's growth engine for decades, with its contribution to the national budget rising from 26.5 percent in 2001-10 to 27.5 percent in the following decade.

The move will allow the city to reduce its payroll and save almost VND1.2 trillion ($51.75 million) a year in salaries and other costs, according to Truong Van Lam, who retired in August as director of the home affairs department after being part of the team that planned the remodeling of the administration.

After HCMC, Hanoi and central city Da Nang will also abolish district and ward people’s councils.