The rules were in response to fears of being swamped with job seekers when 10 countries accede to the European Union May 1.
The cabinet agreed economic migrants would be banned from claiming benefits in Britain for up to two years after the EU expands. The previous proposal was to prevent new migrants from claiming housing benefits and income support for at least six months.
Andrew Smith, the Work and Pensions Secretary, said despite the late timing of the decision, it had been anticipated for some time.
"The need to produce these regulations has been intended all along," Smith said. "We are not having a panic."
The formula will be announced in Parliament Monday.
France, Germany and Italy have also announced similar programs to prevent a flood of impoverished immigrants after May 1.