EU nationals who would like to come to the UK for working purposes would require skilled jobs sponsorship after Brexit, under a plan revealed by Home Secretary Amber Rudd.
If introduced the post-Brexit border controls could slash net migration by up to 100,000.
While the door could be closed to tens of thousands of low-skilled migrants EU tourists and students would still have access in bid to smooth the passage of a trade deal, the Mail Online has reported.
The proposal, drawn up by Mrs Rudd, was put to a Brexit Cabinet sub-committee on Wednesday.
A Whitehall insider told the Mail: "There was a strong consensus that this was the only way to go.
"Ministers agreed that work will continue to see if there is an alternative.
"The reality, though, is that this is the only option that is going to work in the long term and that will deliver what the public voted for – which is proper control of our borders."
The plans are likely to meet opposition from businesses arguing that low-skilled labour is vital to the economy.
Prime Minister Theresa May is expected to announce that EU workers already in the UK will be granted residency.
The plan, which will include provision for self-employed workers, looks to destroy the hopes of remain supporters that Britain will stay in the single market.
Mrs May has said taking control of immigration is a priority.
Mrs May said: "What we are going to do is deliver on the vote of the British people to leave the European Union; what we are going to do is be ambitious in our negotiations, to negotiate the best deal for the British people, and that will include the maximum possible access to the European market, for firms to trade with, and operate within, the European market.
"But I am also clear that the vote of the British people said that we should control the movement of people from the EU into the UK, and we believe we should deliver on what the British people want."
But, European Council President Donald Tusk has said there will be no compromise on free market.
He said: "The only real alternative to a hard Brexit is no Brexit."
Mrs May has previously rejected plans for an Australian-style points system, put forward by Foreign Secretary Boris Johnson.
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