The supervision of all offenders in England and Wales is being brought under public management.
The National Probation Service will take over low and medium-risk cases again after a part-privatisation suffered a lot of criticism.
A recent inspection found thousands of offenders were being managed by a brief phone call once every six weeks.
Following the announcement, Rt Rev James Langstaff, Bishop of Rochester and Bishop to HM Prisons has said: "I welcome the Secretary of State, David Gauke's announcement that all probation services are to be brought back within one national service.
"The previous regime whereby many services were provided by a number of Community Rehabilitation Companies was ill-conceived and has not worked in practice.
"Both former prisoners and communities have not been served well. Launched under the banner of 'Transforming Rehabilitation', the system has not been transformative and has not rehabilitated. Re-offending rates are but one indicator of this.
"Within the proposed unitary service, there will no doubt continue to be multiple providers of particular services.
"I welcome the Secretary of State's indication that the voluntary sector will have a significant role and look forward to further discussions about this.
"There is a wealth of experience within faith-based organisations, many of them Christian, who already work in mentoring, pastoral care, training and other fields of rehabilitation.
"I hope that the contribution of these organisations will be received positively within the reshaped arrangements.
"There is a great opportunity here for churches and Christian organisations to make a difference in one of the most challenging areas of national life."
However, Shadow justice secretary Richard Burgon said changes to the probation service could be "a smokescreen for failing outsourcing giants" to get back involved after the Government announced it was re-nationalising the service.
The Labour frontbencher said he welcomed the fact the Government accepted its probation model was "irredeemably broken", but said it had only come to that conclusion after "putting public safety at risk and squandering hundreds of millions of pounds trying to shore up failing private probation firms".
Speaking in the Commons, he said: "I am concerned that if lessons haven't been learned, these changes could be a smokescreen for failing outsourcing giants to get a route back into probation."
He was responding to a statement from Justice Secretary David Gauke, who said the "responsibility for the management of all offenders will be transferred to the national probation service", which will "remove some of the complexities and challenges in the current model".
But he added: "Alongside these changes we will develop a more clearly defined role for the private and voluntary sector."
Speaking in the House of Lords, shadow attorney general Baroness Chakrabarti said: "This is a welcome u-turn of a disastrous probation policy."
Seeking assurances that "lessons are truly being learned", she said: "Because those of us on these benches have real constitutional concerns and concerns about accountability for public safety in relation to privatising the criminal justice system."
Lady Chakrabarti added: "Today's u-turn, a necessary first step to cleaning up the privatisation mess comes only after hundreds of millions of pounds have been squandered propping up failing private companies and public safety has been put directly at risk as a result."
Stay up to date with the latest news stories from a Christian perspective. Sign up to our daily newsletter and receive more stories like this straight to your inbox every morning.