Freedom of movement will end on October 31, Downing Street said following reports that officials had warned against an immediate change on Brexit day if the UK leaves the European Union without a deal.
Number 10 said the system allowing European Union citizens to freely live and work in the UK would "look different", with changes including tougher checks to prevent foreign criminals entering the country.
Ministers were warned that dramatically changing the system on October 31 could leave the UK facing "another Windrush" - a reference to the immigration scandal which led to Amber Rudd's downfall as home secretary.
Home Office officials produced a discussion paper for a ministerial no-deal Brexit meeting last week warning that doing so could present a "handling and reputational risk" for the Government, the Times reported.
READ MORE: Majority of Scots want to end freedom of movement post-Brexit
A source told the newspaper the document raised concerns that an "interim" immigration system would prove impossible to enforce because the Government and employers would be unable to distinguish new arrivals from those already here.
It recommended that free movement should continue until the new immigration system was ready in January 2021 to provide "maximum certainty" to EU citizens and employers.
But a Downing Street spokeswoman said: "Freedom of movement as it currently stands will end on October 31 when the UK leaves the EU.
"So for example we will introduce, immediately, much tougher criminality rules for people entering the UK."
Details of other changes are being developed and will be set out by Prime Minister Boris Johnson and Home Secretary Priti Patel.
The Prime Minister wants an Australian-style points-based immigration system tailored to suit the UK's needs after Brexit.
The Downing Street spokeswoman insisted that EU citizens currently resident in the UK would not be prevented from re-entering the country after trips abroad, although it was unclear how checks would be carried out.
The system allowing EU citizens to apply for settled status would be unchanged and the two million who had not yet completed the process would not be prevented from entering the UK by the ending of free movement.
"The Home Office have set out that no one eligible for settled status will be unable to re-enter the UK when free movement ends and they have obviously been doing a significant amount of work to communicate how you apply," the spokeswoman said.
The 3 Million group, which campaigns for the rights of EU citizens in the UK, said in a statement: "The idea of ending freedom of movement abruptly on October 31 in case of no-deal is reckless politics.
"It hollows out the Prime Minister's unequivocal guarantee to EU citizens he has given only three weeks ago.
"Ending freedom of movement without putting legal provisions in place for those EU citizens who have not yet successfully applied through the settlement scheme will mean that millions of lawful citizens will have their legal status removed overnight.
"We have been calling for the settlement scheme to be a declaratory registration scheme, so all EU citizens who have made the UK their home are automatically granted status, as promised by those in Government.
"Otherwise this will open the door to mass discrimination under the hostile environment with employers, landlords, banks and the NHS unable to distinguish between those EU citizens with the right to live and work in the UK and those without."
Liberal Democrat home affairs spokesman Sir Ed Davey said there was a "question mark" over whether the Government's plans to end freedom of movement on October 31 would be legal and whether the ports and the borders "could actually cope logistically".
He told BBC Radio 4's World At One programme: "This is increasing uncertainty for all employers and I think could be highly damaging for people using the NHS or depend on the services of a business that has EU workers."
The Government he said "hasn't even said what they'd put in its place", adding: "This is chaos gone mad. Priti Patel is almost setting fire to the British economy and British public services."
Josh Hardie, CBI deputy director-general, said: "Businesses and workers know the immigration system is changing. Yet announcing that the existing arrangements may end before a replacement has been designed, delivered or tested will only cause confusion.
"Now is the time for Government to reduce uncertainty, not add to it unnecessarily and hinder no-deal preparations.
"Taking time to prepare a new system will help protect the UK's attractiveness. Firms will need at least two years to adapt to any new immigration system. Most importantly, getting it right matters to millions of people."
Yvette Cooper, chairwoman of the Commons Home Affairs Select Committee, said the panel had warned months ago that the Home Office "needed a proper plan or they would end up with a repeat of the Windrush scandal".
She added: "The Prime Minister says he is committed to guaranteeing the rights and protections of EU citizens, but the EU settled status scheme for existing residents is still in its early stages, and most people haven't yet been through the scheme."