The current discount of up to£50,000 will be replaced on 11 February next year by nine regional limits ranging from£38,000 in London and the south-east to£22,000 in the north-east.
Tenants will continue to be able to claim up to 60% discount on a house and 70% on a flat.
Housing minister Hilary Armstrong said: 'We announced the plans in July to reduce the limit to a fairer level which reflected more closely the actual cost of buying a local authority home in each of the nine English regions. The great majority of these welcomed the proposal.'
Tony Peak, head of housing at Sutton LBC, said: 'The number of people exercising their right to buy is nowhere near the level it previously was.'