The first stage of the system becomes operational on Friday 29th February 2008 – and will apply fully by the end of the summer.
Ministers say the changes are the biggest for a generation – and will allow the UK to better control migrants from outside EU.
But the Conservatives say they want an annual cap on the numbers allowed in.
Under the system, migrant workers will need to show they have sufficient skills under new rules that assess whether or not the economy needs them.
Applicants are given a score based on their abilities, with a special body advising ministers on how many points to award to certain skills to reflect economic conditions.
The system is based on Australia's immigration rules and has been more than three years in the planning. It replaces a system of more than 80 categories that critics say was confusing, complex and failing to meet government goals.
The first of five tiers to come into force only affects highly-skilled people. At first those already living in the UK who want to extend their stay – 14,000 people last year – will be covered. The system will be fully in place for all highly-skilled workers by the end of the summer, says the Home Office.
The Points System at a Glance
i – Skills Assessed
ii – Points Awarded
iii – Points Lead to Entry
iv – 80 Categories Reduced to 5
v – Two-Year Roll-Out
Points System Explained
Highly-skilled workers can apply to come to the UK without a job offer because they are considered to be among those most likely to benefit the economy. The category includes high-flying business people, entrepreneurs and scientists.
Home Secretary Jacqui Smith said: “The introduction of our Australian-Style points system will ensure that only those with skills the country needs can come to work and study.
“Today's proposals are part of the biggest changes to British Immigration policy in a generation, which includes a new deal for those migrants seeking citizenship here, a new UK Border Agency to strengthen controls at the border and the introduction of ID cards for foreign nationals.”
Immigration minister Liam Byrne told BBC News the Australian model had been closely examined by the British government.
“I think that people want to know that only those who we need to come to Britain should be allowed to come and I think a points system has worked extremely well in Australia so we have studied that hard, we think it would work well in this country.”
The next tiers to come into operation cover skilled workers who have a job offer, temporary workers and young people allowed to come in for a short time. Businesses who want to bring in skilled workers from the autumn will need licences.
Students will be covered from next year – but no date has been set for admission of low-skilled workers, largely affecting people from poorer parts of the world.
The government has also introduced new fines for those found to be employing illegal immigrants.
The points-based-system does not cover workers from Eastern European nations that have joined the EU in recent years. These workers, along with British people, have freedom of movement around the union.