The newspaper, citing a senior defense official, said the new Defense Clandestine Service would work with the CIA to expand their cooperation in overseas spying.
The reorganization was approved last week by Secretary of Defense Leon Panetta, but has yet to be presented to key members of Congress, some of whom will likely have questions about the need for the realignment.
"My question is why?" said one Senate aide who received a preliminary briefing in the plan. "What's missing and what's going on?"
Defense officials told the Post that what's going on is an increasing convergence of military intelligence and the CIA when it comes to clandestine operations in Iraq and Afghanistan. The tighter relationship has also filtered into U.S. espionage activities involving Iran, China and nations involved in terrorism or nuclear proliferation.
The Post's source said the new clandestine service would "make sure officers are in the right locations to pursue those requirements."