"We will discuss a decree to dissolve municipalities and replace them by special councils," he said in a video of a cabinet meeting that was posted online.
The new councils will also be elected, but under new rules that he will write, he said. He has previously called the existing councils "states within a state" and said they were "not neutral."
In the 2018 local elections, a third of municipal councils came under the control of Ennahda, an Islamist party that has been the most vocal critic of Saied.
Elected municipal councils were introduced after the 2014 constitution called for decentralisation - a constitution that Saied has replaced with one he wrote himself and passed last year in a referendum with low turnout.
"Unfortunately the head of state is not convinced by decentralization," said Adnen Bouassida, the head of the National Federation of Municipalities on Mosaique FM radio.
Last month authorities detained leading critics and opposition figures, including prominent Ennahda members, whom Saied labelled criminals, traitors and terrorists in the first significant crackdown on dissent against his rule.
Saied has concentrated nearly all powers in the presidency since he suddenly shut down the elected parliament in July 2021 and moved to rule by decree, moves that opposition parties have called an undemocratic coup.
The president has rejected that accusation, saying his moves were legal and necessary to save Tunisia from years of chaos at the hands of a corrupt, self-serving political elite.
Most political parties boycotted elections in December and January for a new, mostly powerless, parliament, meaning the local councils were the last effective branch of government where they retained a presence.
