The Pentagon is creating a new intelligence agency that will focus on Iran and China as it begins to pivot away from war zones in Iraq and Afghanistan, the New York Times reported.

The newspaper said late Monday that the new Defense Clandestine Service would make use of existing agents, authorities and assets and work closely with the Central Intelligence Agency to track emerging threats.

"It will thicken our coverage across the board," it quoted a senior defense department official as saying.

Case officers from the Defense Intelligence Agency already secretly gather intelligence outside of conventional battle zones, the Times said, and the latest move further cements cooperation between the military and the CIA.

The new intelligence service is expected to grow "from several hundred to several more hundred" agents in the coming years by shifting personnel and funding from existing assignments, the Times quoted the official as saying.

Defense officials did not immediately respond to AFP requests for further information.

The announcement of the new agency comes a week after the Pentagon nominated Lieutenant General Michael Flynn -- who previously served with the secretive Joint Special Operations Command (JSOC) -- to head military intelligence.

The selection of Flynn -- who had been a strong critic of military intelligence when he served as the top intelligence officer in Afghanistan in 2010 -- reflects the ascendancy of special forces in recent years.

The JSOC has been behind the killing of numerous suspected top insurgents in Iraq and Afghanistan in recent years and carried out the raid that killed Osama bin Laden nearly one year ago.