Cutting the number of councils could save up to ￡650m over 10 years, the Welsh government has claimed.
Public Services Minister Leighton Andrews confirmed plans to cut the 22 councils to eight or nine .
The shake-up could result in the loss of up to 1,900 jobs as administration services are slimmed down.
But Bob Bright, the Labour leader of Newport council, complained the plans were advancing without "meaningful discussion".
The Draft Local Government (Wales) Bill , published on Tuesday, forms the basis of consultation but will not become law until after the assembly election next May.
The proposals to bring back bigger county councils are broadly similar to pre-1996 arrangements.
The up-front costs of the merger would be between ￡97m and ￡246m, but the Welsh government said it expected that will have paid for itself within two to three years.
The number of councillors would fall from 1,250 to between 700 and 900, although the final decision would be taken by the independent Boundary Commission.
And there would be fewer administrative jobs in local government, with the current number of around 9,000 expected to fall by about 1,400 and 1,900.
Decisions on whether those staff are made redundant, offered early retirement or given new jobs would be taken by the new councils.
Reducing the number of administrative posts would cost up to ￡40m, with redundancies and early retirement for senior managers costing an additional ￡6.6m to ￡12.4m.
Mr Andrews said: "Our vision for local government is for activist councils, engaged in delivering modern, accessible, high quality public services with their local communities."
He added: "There is a real opportunity here for local government to make significant savings for taxpayers and if councils work together, plan well and involve their staff there is the opportunity for savings even greater than the ￡650m we have identified.
"This means more money for front line public services, more money to invest in communities and more money to support local economic prosperity."
Mr Andrews has previously called the case for fewer local authorities "compelling", but the plans have been criticised by the body representing local authorities, some Labour council leaders and an ex-Labour minister.
Dyfed would be brought back by re-merging Carmarthenshire, Pembrokeshire and Ceredigion, and West Glamorgan would return by joining Swansea once more with Neath Port Talbot.
Cardiff would merge with the Vale of Glamorgan, while a merger between Caerphilly, Torfaen, Blaenau Gwent, Newport and Monmouthshire would create Wales' biggest council, with a population of nearly 600,000.
Bridgend would join Rhondda Cynon Taf and Merthyr Tydfil.