Lotto tickets double in price to £2 from today, but more winners will share in the prize pot, operator Camelot has said.
The increase will see the prize for matching three numbers rise from £10 to £25.
But the prize pot for matching five numbers will drop by £500 to £1,000, while the reward for matching five numbers and the bonus number will halve to £50,000.
The prize for matching four numbers will increase from £60 to £100.
The price rise is the first since Lotto launched in 1994 and follows research which found that consumers "want more ways to win more money" from the game, according to Camelot.
An average 800,000 players win prizes for matching three or four numbers each week, while around 800 players match five numbers or five plus the bonus.
The average Saturday jackpot will increase from around £4.1 million to £5 million and the Wednesday jackpot will increase from an estimated £2.2 million to around £2.5 million, while a new Lotto raffle will guarantee at least 50 winners of £20,000 in each draw, Camelot added.
Camelot is holding two £10 million jackpot draws to mark the launch of the new game.
The special draws, to be held on Saturday and on October 12, will also see 1,000 raffle ticket-holders winning £20,000 on each occasion.
Camelot UK managing director Andy Duncan said: "Our players still love Lotto but after 18 years they say they want more from it.
"We've spoken extensively with them to develop a re-energised game and the changes we're introducing to rejuvenate Lotto will give them what they have asked for: £25 for matching three numbers, bigger jackpots and a brand new way to play and win one of 50 prizes of a guaranteed £20,000 on each and every draw."
Lotto Rollover draws will also change, with the number of raffle prizes on offer increasing significantly with each roll of the jackpot.
Total National Lottery sales have increased by 35% since 2002, with the number of players growing by more than 12% in the last five years.
Players have also helped to raise more than £29 billion for Good Causes.