The limit on contactless payments is set to rise from £45 to £100.
Chancellor Rishi Sunak, who will announce the plans in his 2021 Budget, said the change will boost the retail sector and help protect jobs in the UK.
The change will legally come into force from today, but firms will need to make the necessary systems changes before being able to offer customers the higher limit.
The UK has been allowed to make the change after leaving the EU, which limits contactless payments to £45 in member countries.
Mr Sunak, said: “As we begin to open the UK economy and people return to the high street, the contactless limit increase will make it easier than ever before for people to pay for their shopping, providing a welcome boost to retail that will protect jobs and drive growth across the capital.”
Research shows that eight out of ten UK adults used contactless payments in 2019, the government said.
The increase comes after the Financial Conduct Authority held a public consultation on contactless limits and recommended the change.
Mr Sunak has pledged to do “whatever it takes” to help people and businesses through the coronavirus crisis.
He is set to announce an extension of the furlough scheme until the end of September when he unveils his Budget in the House of Commons this afternoon.
The chancellor will outline a three-point plan to support people through the coming months, rebuild the economy and fix the ravaged public finances in the wake of the pandemic.
