A new Newry and Down district council will absorb the part of the Mournes Area of Outstanding Natural Beauty that lies outside the current Down district boundary, in the neighbouring Banbridge district.
The reorganisation of local government will see the number of councils reduce from 11 to 26 and will be achieved by merging district councils without otherwise affecting existing boundaries.
The Office of the Local Government Boundaries Commissioner is also proposing variations to the existing council ward structures.
It wants a reduction in the number of wards across Northern Ireland from 582 to 460, with each new district having 40 wards - except Belfast that will have 60 wards.
Consultation on the proposals will last until 12 November.