The UK will establish an independent football authority for England that will have the power to block takeovers as well as investigate and sanction clubs.
The Department for Digital, Culture, Media and Sport (DCMS) said on Monday the watchdog will be backed by primary legislation and handed oversight to deal with the game's finances, club ownership and corporate governance.
The government will endorse 10 key strategic recommendations set out in a fan-led review in 2021 on how to improve governance in the game, published by former sports minister Tracey Crouch in November.
A statement from the DCMS said: "The regulator will also be given the power to exercise financial oversight of clubs, including information gathering, investigation and enforcement powers. The review recommended looking at financial distribution, including solidarity payments.
"It is the government’s view that this should be solved by the football authorities in the first instance."
It will also be tasked with applying a new enhanced owners' and directors' test. This replaces the current one administered by the Premier League, English Football League and the Football Association, and will be implemented before acquisition but also on an ongoing basis.
"This will include a new 'integrity test' for all owners and executives, and enhanced due diligence — including sources of funding — upon an acquisition," the DCMS added.
"Football is nothing without its fans and for too long the football authorities have collectively been unable to tackle some of the biggest issues in the game," said culture secretary Nadine Dorries. "The government took decisive action to conduct the fan-led review and today we have endorsed every one of its 10 strategic recommendations and the approach set out by Tracey Crouch."
However, Labour's culture secretary Lucy Powell said delaying the introduction of any legislation until 2024 was "a real disappointment".
"Football clubs are at the heart of communities. We need to urgently bring in new laws to stop any more clubs going bust or being used as a plaything for the wealthy," she said.
Club takeovers have come under renewed scrutiny in recent months amid Roman Abramovich's ongoing sale of Chelsea, the collapse of Bury FC, the Saudi Arabia-backed takeover of Newcastle United last year and the collapse of the European Super League, which left fans and football clubs divided.
In March, the UK government unveiled sanctions against the Russian billionaire Chelsea FC owner following the invasion of Ukraine. Abramovich had planned to offload the club for a price tag of around £3bn.
The coronavirus pandemic has also laid bare the finance of many football clubs that spent big money on players in pursuit of trophies and promotions.
Watch: What the collapse of the European Super League means for football and the clubs involved