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About 2,500 Ministry of Defence jobs will go within three years, as the department changes the way it manages its land and buildings.

Defence Estates, which runs about 2,400 hectares for the MoD, is being replaced by the new Defence Infrastructure Organisation.

The MoD said changes would save £1.2bn over the first four years.

The Unite union said the decision was "absolute madness," and urged the government to change its mind.

Plans to axe 25,000 civilian MoD jobs were outlined in last year's strategic defence review.

The department says it will consult with trade unions over the changes, which it says will "bring together those working on estate and infrastructure activity across the Ministry of Defence".

It says it will bring together 7,000 staff - mostly civilians - working on construction, maintenance and disposal of land and buildings owned by the MoD.

Most of them currently work for Defence Estates, although some work in infrastructure jobs in the RAF, Army and Royal Navy or smaller organisations.

Defence Secretary Liam Fox said having one organisation running the estate would provide "better strategic management" and save money in running costs.

"By making these changes we expect to save about 2,500 posts by 2014 and some £1.2 billion over the first four years alone, without reducing the effectiveness or reliability of the service we deliver.

"This measure will make a significant contribution to the civilian staff reductions and efficiency measures set out last October in the Strategic Defence and Security Review."

He said it was the first change stemming from work by the defence reform unit which aims to overhaul the structure of the MoD.

Unite national officer Kevin Coyne said: "This is devastating for our members. It's absolute madness, the Tories spent the 80s decentralising the MoD and now they're centralising it with Stalinist fervour.

"With 2,500 fewer staff, the maintenance and running of MoD properties and land will be run on a shoestring doing our forces and their families a disservice. We urge the government to step back from this decision."