Patients will be given a choice of providers for mental health and community NHS services, the Government has announced.
The move, which opponents argue will lead to an increasingly privatised NHS, comes into force from next April and covers services worth millions of pounds.
Health Secretary Andrew Lansley said it was "a big day for patients", who will be able to choose care from providers who meet NHS standards on quality, price and contracts.
Providers will compete to offer services and are likely to include private companies, charities and voluntary organisations, as well as the NHS.
Eight NHS areas - including musculoskeletal services for back pain, adult hearing services in the community, wheelchair services for children and talking therapies for adults - are being opened up for competition.
A minimum of three services must be offered in each area of England by September 2012.
The concept of "any qualified provider" has caused huge controversy, with opponents saying it represents privatisation of the health service.
Mr Lansley was forced to water down some of his plans in the Health and Social Care Bill but insists choice is good for patients.
He said: "There is often confusion about these policies - a mistaken idea that competition is there for the sake of it, or to increase the independent sector's role in the NHS.
"But let's look at what this is really about: it's about children getting wheelchairs more quickly.
"It's about people with mental health conditions choosing to receive their care somewhere closer to home.
"It's about older people being able to choose a service that will come to their home - perhaps the vital difference between staying at home or having to move into care.
"It's about real choices for people over their care, leading to better results.
"We are taking a phased approach, offering choice for services where it will improve outcomes, responding to the recommendation of the NHS Future Forum which supported the Government's policy to offer patients greater choice of provider."
Unison head of health, Christina McAnea, said: "Patients should not be fooled - there are huge dangers lurking in plans to allow any qualified provider into the NHS.
"It leaves the door wide open for privatisation of our health service.
"Patients will be little more than consumers, as the NHS becomes a market-driven service, with profits first, and patients second.
"And they could be left without the services they need as forward planning in the NHS becomes impossible.
"Staff will suffer too - their wages, terms and even their jobs could be at risk.
"Far from giving out advice to take this policy forward, the Department of Health should be scrapping this policy and going back to the drawing board."
Ruth Owen, chief executive of the charity Whizz-Kids, said: "We believe any qualified provider will remove the barriers to faster, better wheelchair services by enabling organisations like ours to work collaboratively with the NHS to provide unmet needs, shorten waiting lists and drive innovation."
Sophie Corlett, director of external relations at Mind, said: "Mind is in favour of extending choice and availability for individuals in psychological therapies - both of provider and of type of therapy.
"We would hope that this enables people to have access to treatment in a provider near to their home or workplace and in a manner or by a therapist of their choosing."
Dr Hamish Meldrum, chairman of the British Medical Association (BMA), said: "We support greater choice for patients, although in an NHS with finite resources it will always be limited.
"What we would question is the assumption that increasing competition necessarily means improved choice.
"When competition results in market failure in the NHS, the ultimate consequence is the closure of services, and the restriction of choice for the patients who would have wished to use them."