This, along with radical changes recently introduced to the student route and plans to tackle permanent settlement, will see net migration fall back down to the tens of thousands.
Under the annual limit, employers will be able to bring only 20,700 people from outside the EU to work in skilled professions under Tier 2 (General) of the points-based system. A further 1,000 visas will be made available to people of 'exceptional talent', to ensure that Britain remains open to the brightest and the best.
The 1,000 exceptional talent visas will be given to those who experts believe will make the biggest contribution to science and the arts in the UK.
To ensure that only those with the skills we need can come to the UK to work, prospective workers will need to have a graduate-level job offer, speak an intermediate level of English and meet specific salary and employment requirements. Those earning a salary of £150,000 or more will not be subject to the limit.
Immigration Minister Damian Green said:
'The annual limit will not only help reduce immigration down to sustainable levels but will protect those businesses and institutions that are vital to our economy.
'The new system was designed in consultation with business. We have made clear that as the recovery continues, we need employers to look first to people who are out of work and who are already in this country.
'We are overhauling all routes of entry to tackle abuses, make the system more effective and bring net migration back down to the tens of thousands.'
The Intra Company Transfer route (ICT), which is not part of the annual limit, will also be changed in 3 ways:
the job will have to be in an occupation on the graduate occupation list;
only those paid £40,000 or more will be able to stay for more than a year - they will be given permission to stay for 3 years, with the possibility of extending for a further 2 years; and
those paid between £24,000 and £40,000 will be allowed to come to the UK for no longer than 12 months, at which point they must leave the UK and will not be able to re-apply for 12 months.
Also, from today, Tier 1 of the points-based system will be restricted to all but entrepreneurs, investors and people of exceptional talent as the old Tier 1 (General) category has been completely abolished due to widespread evidence of abuse.
The 'Exceptional Talent' route will be open to current and prospective leaders in the fields of science, engineering and the arts and will allow us to continue to facilitate those who have the most to offer the UK.