Mayor Daley announced Wednesday that the consolidations will take effect on January 1, 2011.
The Department of Cultural Affairs will combine with the mayor's Office of Special Events, which organizes festivals like the Taste of Chicago.
"This is a very, very challenging time for city state and local governments ... unfortunately very challenging not only for citizens of Chicago, but the citizens of America. No One knows how long it'll take for our revenues to rebound fully."
Wednesday's announcement follows the 2008 consolidations of 10 city departments into four.
The mayor did not say how many jobs could be lost as a result of the new changes.
