By David Shepardson

WASHINGTON (Reuters) -The U.S. Federal Aviation Administration plans to cancel leases on its satellite offices in the Washington area as it consolidates operations and moves headquarters staff into a building that houses the U.S. Transportation Department.

FAA Administrator Bryan Bedford said in a previously unreported email to staff seen by Reuters that the move would improve collaboration.

"We will work more effectively when we're together, rather than spread across six different office locations," Bedford wrote. "This will significantly reduce operating costs and enhance collaboration."

Bedford said the timing of the moves of each office will soon be finalized.

On Tuesday, USDOT said it planned to relocate thousands of FAA employees at its headquarters to the department's main office in Washington and consolidate agency IT and other systems.

The FAA is one of several agencies in USDOT. The department plans to move several thousand employees that work at the Orville and Wilbur Wright headquarters buildings to its department headquarters in southeast Washington.

One open question is how many FAA functions -- potentially purchasing, IT, human resources and others -- will be folded into USDOT and if the consolidation will result in workforce cuts.

The FAA, by far the largest part of USDOT, has around 44,200 of the department's nearly 53,000 total employees.

Transportation Secretary Sean Duffy told employees this week the department will begin sunsetting legacy systems and embracing advanced technologies as it works to "streamline our processes, consolidate administrative functions, and modernize our infrastructure."

Duffy said the FAA building is in serious disrepair, with employees unable to even drink the water there. "I think it's important for cooperation and collaboration to be under one roof," Duffy told reporters.

He said some FAA employees might not want to move "and be an entity unto ourselves that's not responsive to anybody in government."

President Donald Trump's administration has been moving to consolidate office space and shrink the federal workforce.

(Reporting by David Shepardson; Editing by David Gregorio)