International students will be able to stay in Britain looking for work for up to two years after they graduate under new rules announced by the government on Wednesday.
Under current rules, introduced by former prime minister Theresa May when she was interior minister, students are only allowed to stay for four months after they finish their degree.
"The important contribution international students make to our country and universities is both cultural and economic. Their presence benefits Britain," Education Secretary Gavin Williamson said in a statement.
"Our universities thrive on being open global institutions. Introducing the graduate route ensures our prestigious higher education sector will continue to attract the best talent from around the world to global Britain."
The government said the new graduate route would enable students to work, or look for work, at any skill level. They could then switched to a skilled work visa if they found a job that met the requirements.
There will not be a cap on the number of students who can apply for the graduate route, it said. There are about 450,000 international students a year studying in Britain.
It will apply to those who start an undergraduate level or above course from next year in any subject at "a trusted UK university or higher education provider which has a proven track record in upholding immigration checks".
"About time. Should have reversed this silly policy years ago. Britain should always be open to the best talent from across the world," finance minister Sajid Javid said on Twitter.
But with concerns over levels of immigration a key driver behind Britain's 2016 vote to leave the European Union, the move was not universally welcomed.
Migration Watch, which campaigns for less immigration, said it was a "retrograde step" which would lead to foreign students staying in Britain to carry out low-skilled jobs.
"The government only seems to come up with ideas for how to increase immigration," it said on Twitter.
"Our universities are attracting a record number of overseas students. There is no need to devalue a study visa by turning it into a backdoor route for working here."