Education minister Caitriona Ruane has admitted that a new single education body is unlikely to be in place by the start of next year because of political deadlock.
The Education and Skills Authority (ESA) was due to take over from the education and library boards on January 1 but interim measures will be introduced, the Minister added.
She said it was neither practical nor desirable to keep the boards and said savings of £21m have not yet been achieved.
"Savings that could have gone straight to frontline services in schools. Those savings will now have to be found in other areas and this will be a huge challenge," she said.
The heads of the education and library boards have warned of the uncertainty causing chaos because of the political stand off between Sinn Fein and the DUP.
Ms Ruane added: "I will however in the coming days, announce interim plans to ensure a smooth transition between the current structures and ESA, in the absence of political goodwill in achieving the Executive decision to have ESA in place by 1 January 2010.
"A reconstitution of the boards as currently constructed is not an option. It is neither practical nor in line with stated Executive policy for radical reform of the education system.
"However, it is imperative that the work already under way to reform the administration of education continues without further delay."
The ESA was planned as part of the Review of Public Administration (RPA) which was designed to streamline bureaucracy.
The DUP has refused to back the new authority because it is unhappy with the treatment of controlled mainly Protestant schools.
DUP MLA Mervyn Storey accused the minister of misleading the public.
"The DUP is perfectly content to debate this bill in the Assembly. The problem does lies with a minister who seems fearful of bringing her own bill to the floor of the Assembly," he said.
"One would almost believe that this minister has no confidence in her own bill. What does that say about her ability to do her job?"
It is planned that the ESA will be the single employer of all school staff in Northern Ireland.
It will replace the five education and library boards and four other bodies including the Council for the Curriculum, Examinations and Assessment (CCEA) and the Council for Catholic Maintained Schools (CCMS).
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