Teenagers who fail to score at least a Grade C in English and maths GCSEs will have to continue studying the subjects, the government has confirmed.
It is thought the change could affect more than 250,000 young people in education or training in England.
Education Secretary Michael Gove said the subjects were the ones "employers demand before all others".
The change coincides with another new policy which sees the education participation age raised to 17.
It means 17-year-olds are legally required to be in college or school or some form of job-based training. The age will rise again to 18 in 2015.
'Huge impairment'Teenagers who fail to get a decent score in English and maths will now have to carry on studying until they achieve at least a Grade C.
Up until now, pupils have been able to drop the subjects at the age of 16 without having gained a qualification in them.
End Quote Professor Alison WolfEvery other country in the developed world concentrates on improving the language and maths skills of its post-16 students, and so should England"
Many would never study these subjects again, prompting concerns from employers that too many young people lack skills necessary for work.
Last year, there were more than a quarter of a million 19-year-olds without a C grade in English and maths.
The intention is for teenagers who missed C grades to retake GCSEs in maths and English, but there will also be an option to take other types of maths and English lessons.
Skills minister Matthew Hancock told the BBC it was not about resitting the exam but continuing to learn English and maths.
"For those who fail to get a C at GCSE, it's a huge impairment to their future life, their ability to participate not just in work but also as a citizen " he said.
"The crucial thing is that they keep learning and if they can get up to that GCSE standard, that's terrific."
He said it was up to the individual whether or not to retake the exam, but a resit would be the expectation.
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Skills minister Matthew Hancock: "The crucial thing is that they (pupils) continue to keep learning"
Mr Hancock added that most of those who did not attain a grade C first time around headed to a college and the government had a programme to increase the number of English and maths teachers at those institutions.
'Wasted year'The importance of developing basic skills beyond the age of 16 was emphasised by Prof Alison Wolf in her report on improving vocational education for 14 to 19-year-olds.
She found that too many vocational qualifications lacked value for employers and too many youngsters were entering adult life without adequate skills in literacy and numeracy.
"Good English and maths grades are fundamental to young people's employment and education prospects," she said.
"Individuals with very low literacy and numeracy are severely disadvantaged in the labour market."
Speaking after the announcement, Prof Wolf welcomed the implementation of her proposals.
"Every other country in the developed world concentrates on improving the language and maths skills of its post-16 students, and so should England. Recognising the central place of English and maths skills in society is long overdue," she said.
But Labour's shadow education secretary, Stephen Twigg, said more urgent action was needed.
"In 2012 Labour set out ambitious plans for all children to study English and maths to 18.
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Alison Sherratt, Association of Teachers and Lecturers: "Children who fail the exams so consistently... need the practical things rather than another test."
"A whole wasted year later and the government have only got half way there. This isn't good enough. [Prime Minister] David Cameron needs to listen to employers - they want all young people to continue building these key skills to 18."
Alison Sherratt, president of the Association of Teachers and Lecturers, said she was not convinced about the change.
"It's going to be hard because they're going to obviously have to find a lot more English and maths teachers to put this into place," she told BBC Breakfast.
Christine Blower, general secretary of the National Union of Teachers, said: "It's critical the government works with schools and colleges to make sure that what is on offer for those young people is not marching them in and out of the exam room, but actually making sure they are developing by having an appropriate curriculum."
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