The first national identity cards for more than half-a- century will be issued within three years after the protracted parliamentary wrangling over the controversial scheme ended.
After rejecting the plans five times, the House of Lords finally dropped its resistance to the fundamental principle of ID cards.
The scheme, first produced three years ago by the Government, is expected to receive Royal Assent today.
The Lords accepted an offer from the Home Office that anyone applying for a new biometric passport before January 2010 could opt out of having an ID card.
Travellers will, however, be required to submit their details on to the register that will underpin the scheme, which is due to begin in 2008-09.
The plan was backed by 287 to 60 in the Lords, with only the Liberal Democrats still opposing it. The Tories, however, said the choice of 2010 would enable them to make identity cards a key issue in the next general election, expected in 2009.
The compromise averted the threat of a constitutional crisis between the two Houses. Charles Clarke, the Home Secretary, has signalled his determination to force ID cards on to the statute book as soon as possible. He had made clear that the Government was prepared to keep MPs and peers sitting through the night if necessary to drive the scheme into law.
Until yesterday peers had strongly opposed the ID Cards Bill on the basis that Labour's manifesto had said the scheme would initially be voluntary. They argued that requiring new passport holders to apply for ID cards amounted to "compulsion by stealth", a claim rejected by the Government.
Baroness Scotland of Asthal, the Home Office Minister, told peers: "We have conceded on many points, we have moved and moved again to the point where it is hard to see what more the Government can give."
David Davis, the shadow Home Secretary, said: "... no one who does not want to have an ID card before the next election will have to have one".
Simon Davies, visiting fellow at the London School of Economics and a vociferous critic of ID cards, said the Government had not made any meaningful concessions. But he added: "We're not going away. We will be on the Government's tail through the whole development process."
Nick Clegg , the Liberal Democrat home affairs spokesman, said: "The British people must have a copper-bottomed guarantee that compulsion by stealth will not be imposed ... before they have had the opportunity to make their own judgement at the ballot box at the next election".
Phil Booth, national coordinator of NO2ID, said: "Anybody who thinks this is compromise has not understood the Bill. The problem has always been the database, not the card.
"Millions are already vehemently opposed - the Home Office will have to round them up and force them to be fingerprinted, which will bring home to the public the true nature of the scheme. This is a self-destructive policy to dwarf the poll tax."
David Blunkett, the former Home Secretary, published the first ID card proposals in November 2003 after months of negotiation with Cabinet colleagues. Ministers have variously argued the cards will help combat identity fraud, false benefit claims, terrorism and illegal immigration. The first ID Cards Bill ran out of time before last year's general election, but was reintroduced shortly afterwards by the Government.
The Home Office will now press ahead with awarding contracts for the scheme, believed to be Europe's largest public sector computer. The running costs have been estimated at nearly £6bn over 10 years.
Ministers say the cards will cost about £93 each; critics say the cost could be three times higher.
From 2008-9, the estimated seven million people who renew their passports every year will have biometric details - probably including their irises and fingerprints - recorded.
They will automatically be included on the ID register, but yesterday's compromise means that they will not have to take an ID card if they apply for a passport before 2010.