The article is devoted to the peculiarities of a new administrative-territorial system formation as well as to the current state and directions of local self-government and decentralization of power reform in Ukraine. The authors explored the processes of finding the optimal format to provide local self-government functions. The regularities of the management levels strengthening according to different schemes are determined. The key aspects of practical experience of unification and the local management level strengthening in the amalgamated territorial communities are discovered. The prospects of realization of a wide range of powers by local self-government bodies are determined. The peculiarities of local and regional administrative-territorial transformations led to the different levels of management strengthening characterised. The authors underlined that local self-government reform is to be carried out on the basis of the Constitution of Ukraine and regulatory acts, the provisions of the European Charter of Local Self-Government. The following principles are to be adhered: the rule of law; openness, transparency and civic participation; subsidiarity; availability of public services.