Macron said the change -- which he proposed while running for president -- would have "positive effects on the general quality of parliamentary work".
The Senate has 348 members, while the lower house National Assembly has 577.
"Until now, we were on the wrong track," Macron said, adding: "We preferred rules to initiative."
The 39-year-old French leader, elected in May, laid out a series of proposals including a new law that will reduce the number of lawmakers in both houses of parliament by one third.
He also proposed that the electoral system be changed to allow more proportional representation "so that all tendencies are fairly represented (in parliament)".
Macron said he wanted all the "deep transformations... that our institutions badly need" to be completed within a year.
"I want... us to avoid half-measures and cosmetic arrangements," he said. "These reforms will be submitted to a vote in parliament but if necessary I will have recourse to a vote by our fellow citizens in a referendum."
State of Emergency
French President Emmanuel Macron said Monday he will "this autumn" lift a state of emergency in effect since the jihadist attacks in Paris in November 2015 that killed 130 people.
"I will re-establish the freedoms of the French people by lifting the state of emergency this autumn, because these freedoms are the precondition of the existence of a strong democracy," Macron said in an address to both houses of parliament.
The French leader last month set out a tough new anti-terrorism law designed to allow the lifting of the state of emergency, which has been extended five times.
The current provision expires in mid-July, when Macron's new centrist government is expected to extend it again until November 1 while the new law is prepared.
The legislation has received the go-ahead from France's top administrative court despite concerns from rights groups including Amnesty International and Human Rights Watch that it will enshrine into law draconian powers allowed under the state of emergency.
Amnesty complained last month that French authorities were abusing anti-terrorism measures by using them to curb legitimate protests.
The new anti-terror law would give French authorities greater powers to act to protect an event or location thought to be at risk from attack, without first seeking permission from the courts.
The draft law would also allow places of worship thought to be promoting extremism to be shut down for up to six months.
Prime Minister Edouard Philippe argued it struck the "right balance" between respecting freedoms and reinforcing security.
'Cour de Justice' to be suppressed
Macron also said he wanted to suppress the 'Cour de Justice', which investigates the actions of French ministers.