Abstract: Functional deconcentration is a key approach to optimizing the spatial structure of megacities and promoting high-quality urban development. By integrating the core–periphery model with institutional collective action theory, this study develops a process-oriented analytical framework for urban functional deconcentration and uses the relocation of Beijing’s non-capital functions as a case to examine the underlying logic of coordinated functional deconcentration in megacities. The findings show that the combined effects of government-led institutional forces, centripetal forces, and centrifugal forces give rise to four typical patterns: agglomerative growth, agglomerative upgrading, dispersed growth, and dispersed reduction. Further analysis indicates that institutional forces generate a combined momentum for functional deconcentration by strengthening centrifugal forces to facilitate the reduction of non-core functions and reshaping centripetal forces to promote the upgrading of core functions. Spatial dynamics, functional attributes, and receiving capacity jointly constitute the boundary conditions for selecting different patterns of coordinated functional deconcentration. Meanwhile, the strengthening of core functions and the deconcentration of non-core functions form a continuous chain of functional restructuring through spatial release, functional introduction, and regional reception. Depending on the direction and intensity of the combined momentum, local governments employ such mechanisms as coordinated upgrading, coordinated substitution, coordinated expansion, and coordinated transfer to restructure core and non-core functions within a multi-node network. This study reveals the underlying mechanism through which megacities shift from physical relocation to functional restructuring, thereby providing theoretical explanations and practical implications for the development of China’s modern urban system.