Kirchner has sent a draft bill to the country's parliament which, if passed, would mean the Secretariat of Intelligence (SI) is replaced by the Federal Intelligence Agency.
In a taped statement aired Monday night on national TV, Kirchner said the service had "not served the interests of the country."
The body of Alberto Nisman, a special prosecutor investigating the 1994 bombing of a Jewish community center in Buenos Aires, was found inside his apartment on January 18
-- the day before he was due to testify before Congress about his claims.
The previous week, he had filed a report alleging that the President, foreign minister and other officials conspired to cover up Iran's involvement in the bomb attack, which killed 85, in exchange for an oil-and-grain-for-meat deal.
Nisman died of a gunshot wound to the temple. A gun and a shell casing were found near his body and the apartment was locked from the inside.
At first glance, a suicide. But the untimely death raised suspicions immediately.
Then investigators looking into his death said there was no gunpowder residue on his hands, as would have been expected, and a locksmith who let Nisman's mother into the apartment told reporters that anyone could have opened the lock.
Kirchner, who initially called Nisman's death a suicide, soon reversed her thinking and called it "the suicide (that I am convinced) was not a suicide."
However, while Fernandez does not believe that Nisman took his own life, she still insists that his allegations against her government are false.
Nisman was not a hack with an agenda against the President, but a naive investigator who was used by others who fed him false information, Fernandez said.
Nisman's report promised to provide evidence "of the existence of a sophisticated criminal plot, deliberately conjured to cover up and provide impunity to the Iranians accused in the investigation of the attack" of the Jewish community center in 1994.
The 289-page report makes its case based on tapped telephone conversations between representatives of Argentina and Iran.