Street dealers caught with heroin, cocaine or thousands of pounds worth of cannabis could avoid jail under new guidelines for judges which come into force next month.
Offenders who play a lesser role in gangs could be handed community sentences when they come before the courts.
This could include low-level dealers caught with 6kg of cannabis, which could sell for tens of thousands of pounds, and some heroin and cocaine dealers deemed to have played only a minimal role.
So-called drug mules, who bring narcotics into the country and are often exploited by organised criminals, could also get a community sentence if caught with relatively small amounts of class C drugs.
The Sentencing Council, which sets the guidelines for judges, said those used to bring class A drugs into the UK, a more typical offence, would still face jail, but were likely to serve less time behind bars than at the moment. Offenders who were employed by someone else to import or export drugs regularly for profit would face even tougher sentences, up to the maximum of life in prison.
It is the first time all courts in England and Wales have been given a comprehensive guideline setting out how the role of the offender and the quantity of drugs should influence sentencing. Tougher sentences could also be handed down to key players guilty of producing drugs on a large scale and, for the first time, anyone dealing to children or teenagers under 18 would also face tougher treatment by judges.
Lord Justice Hughes, the council's deputy chairman, said: "Drug offending has to be taken seriously. Drug abuse underlies a huge volume of acquisitive and violent crime, and dealing can blight communities. Offending and offenders vary widely, so we have developed this guideline to ensure there is effective guidance for sentencers and clear information for victims, witnesses and the public on how drug offenders are sentenced."
The Association of Chief Police Officers (Acpo) added that the guidelines offered police "consistent guidance yet still provides the courts with flexibility to deal with each case on its own merits where appropriate".
Dr Jennifer Fleetwood, a criminologist at the University of Kent, said the new guidelines were a "missed opportunity" to make sentences "fairer". She said: "These sentences will punish drug mules for decisions over which they have no control."