Parents can begin applying to set up their own "free schools" from today.
The Department for Education (DfE) is publishing a proposal form for groups to fill out, setting out their reasons, the aims and objectives of the school, an outline of a curriculum, evidence of demand from parents and possible locations.
Education Secretary Michael Gove said it was the next step in the Government's education reforms.
Plans for "free schools" were a key plank of the Conservative election manifesto, and they held on to them in the coalition with the Liberal Democrats.
The move will see parents, teachers and charities given state funding to set up and operate schools, similar to the Swedish model, which would be taxpayer-funded and non-fee-paying but independent from state control.
The DfE said today that this would be "in response to parental demand".
The Tories argue the system will give parents more choice, narrow the achievement gap between rich and poor youngsters and drive up standards across the system because of the element of competition it will create.
Groups who make successful bids will have to complete a business plan setting out the school's financial viability at a later date, the DfE said.
They will also have to go through suitability and vetting tests, including criminal records checks.
The first "free schools" are expected to open in September next year.
Mr Gove told the BBC Radio 4 Today programme the "principal motivating factor" for free schools was "closing the attainment gap".
"The situation we have in this country at the moment is that we have one of the most stratified, segregated school systems in the developed world," he said.
"In order to tackle the attainment gap, we want to learn from what's happened in America, Sweden, Canada, other countries that have given schools a greater degree of autonomy."
He said he expected teachers, parent groups, charities and philanthropists to express interest in setting up schools.
"We want to do everything possible where we can extend the choice that parents have - but we're not talking about placing a burden on individual parents. We're talking primarily about liberating teachers."
Mr Gove said there would no longer be a "situation where it's bureaucratic intervention, where it's national strategies designed from the centre to tell people how to run schools".
Before any free school could be established it had to be "rigorously" inspected by Ofsted, he added.
"Let's be clear - these are schools of choice... they will be set up by people who want to enhance and improve what's already there," he said.
"So I'm not anticipating failure, I'm anticipating success. But we will be rigorous in ensuring that those who do go down this road are equipped to make it a success.
"And if they falter, if things goes wrong, if there's any jiggery-pokery, schools will close."
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