The move goes further than first floated by Government, which initially suggested changing the 30m height rule to 18m.
Housing Secretary Robert Jenrick said the plan along with further reforms to the building safety system represented the biggest changes in a generation.
Building regulations in Approved Document B will be updated in May to reduce the trigger height for sprinklers.
Independent construction expert, David Hancock, has also now been appointed to review the progress of removing unsafe ACM claddings from buildings, amid growing frustration about the slow pace of the replacement programme nearly three years after the Grenfell disaster.
Reforms being introduced in the Building Safety Bill include new powers to prosecute firms that fail to comply with stricter requirements.
Construction products such as cladding materials will also face greater scrutiny under the new regime.
Jenrick said: “This new regime will put residents’ safety at its heart, and follows the announcement of the unprecedented £1bn fund for removing unsafe cladding from high-rise buildings in the Budget.”
He said the Government would publish the prospectus for the new Fund in May and open for registrations soon after. The fund will be open to social sector landlords and private sector building owners to remediate unsafe cladding on residential buildings over 18m.
Jenrick said external wall systems on high-rise buildings using Class C or D HPL panels – not treated with fire retardant during manufacture – were unsafe and should be removed as they do not comply with building regulations.
He added that work to remove unsafe cladding from buildings was critical to public safety and so remained a top priority and should continue where it could be done safely during the coronavirus outbreak.