The government has announced a package of incentives, including tax breaks and regulatory easing, to encourage the consolidation of neighboring city and provincial governments.

Prime Minister Kim Min-seok said in a briefing at the government complex in Seoul on Friday that the initiative aims to shift growth drivers away from the capital area to counter population decline and the threat of regional collapse.

Under the plan, the government will inject up to five trillion won a year, or 20 trillion won over four years, into "special cities" created through the mergers of city and provincial governments, through grants and subsidies.

Kim said the status and authority of such cities will rise to a level comparable to Seoul, with the number of vice mayors increased to four and their ranks elevated to the vice-minister level.

He added that greater autonomy will be granted in personnel management and organizational structures tailored to regional characteristics.

The government also said that integrated special cities would be prioritized in the next round of public institution relocations starting in 2027 and that incoming companies would receive incentives such as subsidies, tax reductions and streamlined approval procedures.