The Government has given the formal go-ahead for a £1 levy on holidays protected by the Air Tour Operators Licence from April 1.
The decision was revealed in a written statement to Parliament by under secretary of state for transport Jim Fitzpatrick on Monday.
The £1 ATOL Protection Contribution will be added to package-holiday prices and replace the current system by which tour operators provide bonds to cover the cost of compensation to customers in the event of a business failure.
Tour operators believe the new system will cost them substantially less than the existing scheme, which they say has given none-ATOL regulated holiday companies such as low-cost airlines an unfair price advantage.
The ATOL system is administered by the Civil Aviation Authority and was introduced in the 1970s after a high-profile company collapse. But the development of online business and low-cost airlines means more than half of UK holiday sales now take place outside the system.
Leaders of the travel trade continue to lobby for the new APC to be added to all air fares, although the Government has ruled this out. Major airlines argue there is no risk of them failing, although the European Commission reports more than 50 European carriers have gone out of business in recent years.
A CAA spokesman said the levy would be imposed in line with proposals published this autumn.
It has dismissed concerns that a charge greater than £1 per person may be necessary because of a £20 million deficit in the Air Travel Trust fund which underwrites the ATOL system.