LACS supports coordination structure groups within the Aid Framework, primarily at the sectoral level (Sector Working Groups - SWG) as well as providing specific inputs to the Donor Advisory Group – Head of Cooperation (DAG-HOCs), the Aid Coordination Platform (ACP), and the Annual Aid Workshop (AAW).

LACS reports to the LACS Steering Committee (SC), which includes the Ministry of Planning and International Cooperation (MoPIC), the United Nations Special Coordinator’s Office (UNSCO), Norway, the World Bank, and the European Union (EU). MoPIC is responsible for overseeing LACS operations.

The predecessor of LACS was established in May 2002 as the Local Aid Coordination Committee (LACC) Secretariat to support the work of the local aid coordination structure in Palestine that was set up after the Oslo Accords. The LACC was co-chaired by UNSCO and the World Bank. The LACS itself was created following a decision by the Ad-hoc Liaison Committee (AHLC) in December 2005, co-chaired by the PMO, Norway, the World Bank and UNSCO.

In 2019, the LACS co-chairs agreed that GoP ownership and leadership would benefit by moving daily management of LACS to the PA, in 2021, the PMO took over operational management of LACS (and of SWGs) and associated support for aid transparency and coordination and In August 2024, MoPIC assumed this role from the PMO.