COI will oversee "cross-cutting" campaigns, marketing and research on the growing number of issues handled by several Whitehall departments.
The move was recommended by the inquiry chaired by Bob Phillis, the chief executive of the Guardian Media Group.
When the review was set up a year ago, there were fears in Whitehall that COI's role might be called into question. In fact, the review has cemented its position.
The Phillis committee said: "In the main, COI was praised by its customers and those outside government for its expertise in marketing and bulk media buying for government advertising campaigns."
Following the review, COI will report to a new civil service permanent secretary who will head the Government's communications work, taking the role out of the hands of party political advisers such as Alastair Campbell, the former Downing Street director of communications and strategy.
As a result of the review, COI is to switch more of its spending to local press and radio, a move that will probably mean a lower spend in the national press.
Alan Bishop, COI's chief executive, said he was pleased with the review's findings and defended the recommendation on regional spending. But he said: "We are already heavy users of regional media on press and radio, where we are probably one of the biggest."