A levy to be imposed by planning authorities, replacing the current section 106 deals, has been unveiled by the planning minister Caroline Flint.
The government claims the new Community Infrastructure Levy (CIL) could raise hundreds of millions of pounds per year while developers work within a transparent charging system published by planners.
Announcing the CIL, Ms Flint said it would "help communities thrive and give developers certainty".
"Almost all development creates some need for infrastructure and services so it is only right that development contributes a fair share alongside the billions of pounds of investment the government is putting in," she said.
"CIL will provide vital additional funding for the new infrastructure our communities need, helping them to grow in a sustainable way."
Section 106 agreements have a reputation for drawn-out negotiations and 52% of major new residential schemes do not include such agreements.
CIL will be discretionary for local authorities, which the government says will increase their flexibility to shape their communities and support growth.
The levy also promises greater certainty to industry because charges will be consulted on, independently examined, and published in a local charging schedule. Section 106 will be scaled back.
The move was welcomed by Cllr Paul Bettison, who chairs the Local Government Association Environment Board:
"Councils will be particularly pleased that the Minister has opted for a locally-led approach to funding infrastructure.
"Councils know their areas best and will now be able to work together to prioritise funding for infrastructure projects of benefit to more than one authority."