In China, the combination of land supply finitude and land use inefficiency has become a barrier to sustainable development in urban society and the economy. Land consolidation has been widely implemented as a tool to improve the quality and quantity of land use, but is mainly limited to rural areas and focuses on farmland production, while not taking into consideration of aspects such as life, production, and ecology. Furthermore, contemporary research usually focuses on one land consolidation project, ignoring practical project arrangement at a regional macroscopic level and lacking specific differentiation in designing land consolidation projects. This study aims to create a method to determine functional units for land consolidation (FULC) in metropolitan areas to facilitate the sustainable use of land resources and improve the efficiency of land use. Moreover, a framework to assess the overall demarcation of FULC is developed. The proposed model considers the production, life, and ecology functions in the demarcation decisions regarding FULC. A typical metropolitan area, that is, Haidian District, Beijing, is used as a case study to demonstrate this framework. The analysis shows that the model can provide technical support and practical references for planners and executors to arrange different land consolidation projects at the macroscopic level. By taking all production, life, and ecological properties of the land parcels into consideration, the proposed model enables local governments to meet their sustainable development targets by managing specialized projects for FULC as a spatial governance platform.