Learner drivers will be able to take to the roads at a younger age and can be taught on motorways under proposals formally tabled by the Environment Minister.
The 45mph speed limit would be scrapped, while the 17 age limit at which young people can get behind the wheel will be dropped to 16-and-a-half years.
The commonly seen R plate would also disappear under minister Alex Attwood's plan, to be replaced by an N plate, denoting "new driver", that would be displayed for two years.
Mr Attwood's reforms will require primary legislation and, pending approval by the Stormont Executive, could be introduced at the Assembly later this year.
The minister first outlined his proposals earlier this month but now hopes the final package he has tabled will transform how drivers learn safety skills, thereby cutting road accidents and eventually reducing insurance premiums.
Mr Attwood said: "These proposals would create the most radical change in the driver training regime for a generation. I know that the proposals will challenge our thinking. But the objective of better road safety with the ambition of zero road deaths on one hand and reduced driver premiums on the other makes a bold and informed approach the right approach.
"This is the core argument at the heart of the proposals."
The minister's plans include:
Mr Attwood said: "Road deaths have recently fallen to their lowest level since records began. But we can do more. Car drivers under 25 are responsible for 44% of road fatalities but hold only 11% of full car licences. To turn this problem around we need fundamentally to change how we help new drivers become safe drivers for life.
"We can help make young people better fit to drive on motorways when they have a driving licence rather than facing the daunting task of driving on one after they receive their licence."
On the restriction on young drivers carrying young passengers, he said: "The reason for this is simple. The risk of death and injury where a young driver carries people of his own generation escalates alarmingly when there are one, two or three passengers.
"We should move towards a vision of zero road deaths. We need to take radical action and bold measures to achieve this, in turn reducing insurance premiums."
Otto Thoresen, director general of the Association of British Insurers, said: "This is good news for all young drivers and their parents in Northern Ireland. Minister Alex Attwood is to be congratulated for proposing long-overdue reform to Northern Ireland's driver training system.
"The crash risk of a young driver carrying three passengers nearly triples compared to if they were driving alone. So reducing the number of passengers in cars driven by young people is critical. And by giving young learners a more controlled driving experience before obtaining a full driving licence, they will learn to drive rather than learning to pass the driving test.
"These measures should benefit young drivers on the road and in their pocket. By helping to make them safer drivers and reducing their crash risk, they will benefit from lower motor insurance premiums. The insurance industry has been calling for these reforms, and politicians in Westminster should consider following Northern Ireland's lead in making the changes that are needed to ensure that the young drivers of today become the older drivers of tomorrow."