The reports said a DSS agency has been set up to replace the powerful DRS intelligence agency, which is being dissolved.
Retired general Athman Tartag, an ex-security advisor to the president, is to head the DSS, newspapers reported.
He was named in September as successor to longtime DRS chief General Mohamed Mediene -- better known as General Toufik -- head of a shadowy intelligence service that many viewed as a "state within a state" in the North African country.
Bouteflika has established the DSS under a decree which has not been made public, according to the government daily EL-Messa.
There was no official confirmation of the reports.
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Algeria's ailing 78-year-old leader thus places the entire security services under his direct control, with Tartag reporting back to him on the activities of all the country's intelligence services.
Since his election to a fourth term in April 2014, Bouteflika and his aides have pushed through major changes in Algeria's shadowy intelligence and security apparatus.
In November, former counterterrorism chief Abdelkader Ait-Ouarabi, better known as General Hassan, was sentenced to five years in jail on charges of destroying documents and disobeying military orders.
Bouteflika's public engagements have become rare and he appears on local television only when foreign dignitaries visit.
Opponents, including his rival in the 2014 presidential polls, Ali Benflis, have spoken of a "power vacuum" in Algeria.
In December, Bouteflika underwent two days of medical tests at a cardiology unit in France. After a stroke in 2013, Bouteflika spent 88 days in Paris.