Under the scheme, landlords and letting agents will have to give deposits to a government-approved third party.
With more than 270,000 households renting from private landlords, about £75m is expected to be transferred to the three approved bodies.
While landlords and letting agents have until next May to lodge all deposits, they can start doing so from tomorrow. After 2 October they will be required by law to hand over all new deposits within 30 working days of a tenancy starting.
It is hoped the scheme will prevent letting agents and landlords holding on to money on false grounds.
Housing minister Keith Brown said this happens to as many as 11,000 tenants a year, with an estimated £3.6m wrongly retained.
“These new regulations are historic because they offer, for the first time, a fair, cost-effective approach that safeguards tenancy deposits,” Mr Brown said.