Six-figure "golden goodbyes" for senior public sector staff who are made redundant are be banned in next week's Queen's Speech.
Payments for departing civil servants, senior town hall staff and health service managers are set to be capped at £95,000.
More than 1,800 public sector staff picked up pay-offs of more than £100,000 in 2013.
The Government said the move, which will be contained in an Enterprise Bill, would save millions of pounds for the taxpayer but was primarily driven by a sense of fairness.
Sources said ministers were minded to limit payouts at £95,000, but will consult over the exact amount and over which public sector employees will be affected. One question to be resolved is whether BBC executives will be covered by the new rules.
The move, which was promised in the Tory manifesto, is likely to anger civil service unions as the cap is expected to be applied to existing jobs and not just future contracts.
George Osborne, the Chancellor, said: “It is not right that working people should have to fork out for golden parachutes worth hundreds of thousands of pounds for public sector workers when they are made redundant.
“That’s why we are delivering on our pledge to end six-figure pay offs for the best paid public sector workers, ensuring fairness and value for money for the taxpayer.”Reuse content