Only children in their immediate pre-school year will be eligible for nursery places, Northern Ireland's education minister has said.
In the past, children aged two were enrolled alongside those aged almost four.
John O'Dowd has said it was his priority to make sure all young people received a high-quality education.
He told the Assembly: "The pre-school education programme should be focused on children in the pre-school year only. This has been a long-standing issue and I intend to legislate as soon as possible to define the age range for the pre-school education programme. Only children in their immediate pre-school year will be eligible."
Mr O'Dowd said he would retain a power to enable two-year-olds to be able to access services within schools and nursery schools outside the programme. He will also introduce legislation to prevent schools from establishing new or maintaining existing reception classes.
An additional £1.25 million was allocated to private and voluntary pre-school providers for last year. This equates to an additional payment of £150 per place. The preference given to families receiving benefits will be reassessed.
Mr O'Dowd has said he would review and broaden the definition of social disadvantage. On Tuesday, he also announced a review of the Sure Start programme which helps to secure the wellbeing of children and families, considering possible options for its expansion and how access to services is determined.
The minister said: "Early years education is an important stage of education in its own right as well as essential in helping prepare children for the transition to primary school and continuous learning. I therefore plan to extend the foundation stage curriculum to include a non-compulsory pre-school year and two compulsory primary years. This will be supported by the development of guidance and information for parents and practitioners on managing these transitions."
The chief executive of Early Years, the organisation for young children, Siobhan Fitzpatrick, said: "We particularly welcome the commitment to looking at extending the two-year-old programme, the end of reception and the development of new models of cluster support and training. We also welcome investment in effective leadership and governance in the sector.
"We welcome the statement that early years is now a critical part of the education system, we welcome the commitment to share learning with others and to learn from elsewhere. The opportunity now exists to learn from the new EU Quality Framework and from the experiences in OECD countries."