Foreigners working in Britain will be kicked out after five years if they earn less than £31,000 a year.
Immigration Minister Damian Green is to unveil the radical plan today.
In a speech to an influential think tank, he will say non-EU migrants must prove they are “the brightest and best” if they want to stay.
Under current rules, skilled workers such as nurses and chefs who have been allowed in on work visas are entitled to apply for permanent residency after five years.
But Mr Green will tell the Policy Exchange group: “We will end the assumption settlement is an option for all.
“Instead, we will accord it to the brightest and best.”
He is drawing up plans for a minimum salary of between £31,000 and £49,000 on the recommendation of Home Office advisers.
It would be the first time an income hurdle has been set for migrants who want to stay. Each year about 60,000 in skilled jobs win the right to permanent settlement. The Migration Advisory Committee says a £35,000 pay threshold would cut the figure to 20,000.
Mr Green will say: “We need to know not just that the right numbers of people are coming here, but that the right people are coming here.
“People who will benefit Britain, not just those who will benefit by Britain.”
He will also outline a separate entry route for top musicians, artists and actors.
The Coalition has pledged to cut net migration from 242,000 to “tens of thousands”.
It has announced a cap on non-EU citizens and crackdowns on sham marriages and bogus students.