Motorists claiming to have been unfairly clamped will be able to appeal to independent tribunals with the power to give them their money back.
The change in the law will affect motorists in England, Wales and Northern Ireland and means clamping companies could be forced to pay back excessive fees and award drivers compensation.
Home Office Minister Alan Campbell said the scheme will mean all clampers will be licensed and have to sign up to a code of conduct.
Mr Campbell said: “The Government is committed to preventing abuses by unscrupulous wheel clamping firms and their employees.
“The introduction of an independent appeals process will for the first time provide independent recourse for motorists who feel aggrieved by unfair practices of rogue clamping businesses.”