The policy will see the number of students from England, Wales and Northern Ireland accepted by Scottish medical schools fall at the start of the coming academic year.
They will be replaced by students who either live in Scotland or apply from other EU countries, meaning that the overall headcount on degree courses will stay the same.
The scheme will be phased in gradually, but will result in 100 extra Scottish-domiciled students enrolling over the next three years as those from other parts of the UK fall by the same number.
The controversial policy has never been formally announced by the Scottish Government, but it emerged yesterday after an impact assessment was published online.
The scheme is designed to boost the number of medical students staying in Scotland and working for the NHS, which is under increasing strain due to the nation’s ageing population.
Data suggests that students who were already living in Scotland when they applied are almost twice as likely to stay there after graduating than those from other parts of the UK.
It is estimated that prioritising Scottish students in such a way will result in an extra 36 doctors entering the first year of speciality medical training north of the Border every year.
However, the impact assessment also acknowledged that students from England, Wales and Northern Ireland were “likely to be disadvantaged” by the policy.
It added that the scheme had “caused concern with universities”, some of which were worried about the “unequal treatment” of students based purely on where they lived.
The policy may also result in a drop in medical school applications from students based in other parts of the UK, it said, but argued that the benefits to the NHS meant all such issues were justified.
Universities Scotland said it welcomed the opportunity for more Scots to study medicine, but that students from other parts of the UK would “unfortunately lose out” as a result.
“We will continue our constructive dialogue with the Scottish Government about how workforce needs across the NHS can be met, including monitoring the success of this initiative,” said the body’s director Alastair Sim.
Scottish Conservative education spokeswoman Liz Smith said it was “no surprise” that the policy was causing concern among some universities.
“The direct cost of increasing places for Scots-domiciled and EU students would be placed on students from elsewhere in the UK,” she added.
“This is yet more evidence of the deeply damaging discrimination inherent within SNP higher education policy.
“It has been warned about the effects of this discrimination for several years but it continues to ignore all the advice it receives. As such it is many highly qualified students who are losing out.”
A Scottish Funding Council spokesman said: “Analysis of medical students’ destinations shows that Scots domiciled graduates are more likely to stay and work in Scotland.
“By increasing the number of places for those already resident in Scotland, the needs of NHS Scotland have been recognised, with a view to ensuring that Scotland has the number of doctors it needs to support communities across the country.”
A Scottish Government spokeswoman said: “Evidence shows that Scots domiciled graduates remain working in NHS Scotland in the longer term at a significantly higher rate than graduates from elsewhere in the UK or overseas.
“Following discussion with universities, a new target for Scottish domiciled and the rest of EU medical student intake for 2019-20 was introduced in line with Scottish Government guidance to increase retention of medical students.”