The cabinet on Wednesday approved an action-plan for the reform of the welfare services, which will be co-funded by the EU with €7.4m.
Deputy government spokesperson Klelia Vasiliou said the plan for the modernisation and restructuring of the department followed a public consultation.
Details of the plan will be presented by the labour minister at a later date, Vasiliou said.
Observers have been saying for years that the department needed an overhaul to be able to deal with current challenges.
Its shortcomings were highlighted in the most tragic manner recently following the suicide of a 15-year-old boy whose family was facing abject poverty, psychological problems and domestic violence.
His case was known to authorities since 2007 but it appears no one had taken action earlier that would have possibly prevented his death.
The cabinet ordered an independent investigation across four state agencies to determine if any had criminal or disciplinary responsibility.
Representatives of state services told parliament last month they were experiencing problems when dealing with cases concerning violence against children.
Senior official at the social welfare services, Maria Kyradji, said there had been an increase in such cases during the past 10 years. She said they were complex cases and that her service responded within its means.
The representatives of the state mental health services, the education ministry and the police raised the issue of parental consent which is not always given, making their work more difficult.
The department was also criticised in 2018 after a 29-year-old woman committed suicide following years of sexual abuse in the hands of a priest.
Social workers were accused of turning the blind eye when Elena Frantzi had told them as a child that her foster father – the priest – had sexually abused her.