The £5 billion national identity card scheme is to be scrapped by the new coalition Government within 100 days.
The abolition of the card scheme and its associated register will be the first piece of legislation introduced to the new parliament by the Government.
Home Secretary Theresa May said the Identity Documents Bill, published on Thursday, will invalidate all existing cards.
For those card holders who paid £30 under the Labour Government, they will no longer be able to use them to prove their identity or travel in Europe.
The Identity Commissioner role, which was originally created to prevent data leaks, will be terminated too.
The Government is desperate to deal with the UK budget deficit and the scrapping of this scheme will save £86 million over four years and avoid £800 million in costs that would have been covered by fees.
Theresa May said: "This Bill is the first step of many that this Government is taking to reduce the control of the State over decent, law-abiding people and hand power back to them.
"With swift Parliamentary approval, we aim to consign identity cards and the intrusive ID card scheme to history within 100 days."