The Defense Clandestine Service, approved by Defense Secretary Leon Panetta last week, would work closely with the CIA at a time when the military and spy agency increasingly focus on similar threats, the senior Defense Department official told reporters on condition of anonymity.
"This is principally a realignment within the Defense Intelligence Agency," the official said. "This is basically trying to make more effective or efficient what we're already doing."
The DIA -- a Defense Department agency that is one of 16 separate U.S. government agencies conducting intelligence activities considered necessary for foreign relations and national security -- focuses mainly on collecting tactical and operational intelligence used day to day by battlefield troops.
Those areas are to remain the focus of the agency, which has more than 16,500 U.S. military and civilian employees worldwide, the defense official said Monday.
The Pentagon concluded -- in response to a classified study completed last year by the office of National Intelligence Director James R. Clapper, a retired Air Force lieutenant general who was the DIA's director from 1992 until 1995 -- that the military needed to boost its espionage focus beyond battlefield tactics to include "national intelligence," the official said.
National intelligence involves gathering information about global issues -- from China's military expansion and Iran and North Korea's nuclear threats to global terrorism and weapons of mass destruction -- and sharing that intelligence with other agencies.
The official downplayed concerns the Pentagon was seeking to usurp the CIA's role, saying the DIA would strive for "closer integration" with the CIA and other U.S. intelligence agencies.
DIA officers already often work out of CIA stations at U.S. embassies and gather intelligence, including on terrorism and weapons proliferation, undercover like their CIA counterparts, he said.
"Several hundred" DIA case officers -- about 15 percent of the agency's case officers -- will be part of the new service, the defense official said.
This amounts to about 3 percent of the entire agency's staff, a United Press International analysis indicates.
The new service will be funded within the Pentagon's existing budget and require no new manpower or new legal authorities, he said.
The service is expected to grow by "several more hundred" operatives in the coming years, the official said.
New, more clearly delineated career paths will give DIA case officers better opportunities to continue their assignments within the agency, rather than move to the CIA, he said.
The plan was unveiled about a week after a senior U.S. Army officer with extensive experience in special operations and counterinsurgency fighting in Iraq and Afghanistan was nominated to serve as the next DIA director.
U.S. Army Lt. Gen. Michael T. Flynn, who would replace Lt. Gen. Ronald Lee Burgess Jr., published what The Washington Post called a harsh critique of U.S. intelligence operations in Afghanistan while in the central Asian country to oversee a revamping of the U.S. mission there.
He criticized collectors as being too focused on tactical threats and failing to understand the broader demographic and political context of the battlefield, the Post said.
The blurring between the Defense Department and the CIA is evident in the organizations' upper ranks. Panetta previously served as CIA director, and that post is now held by retired four-star Army Gen. David Petraeus.