A temporary limit on the number of non-EU migrants allowed into the UK is to be announced by the home secretary.
Theresa May said she will limit worker numbers to 24,100 - down around 5% on last year - between now and April 2011.
The government says its measures will eventually bring net migration down to the levels of the 1990s.
Business Secretary Vince Cable defended the cap but said it must be implemented flexibly, while Labour said it was "fraught with difficulty".
Reducing net annual migration was a key Tory election pledge which survived the coalition agreement with the Liberal Democrats, who had previously opposed a cap.
'Tough but fair'
Ms May told the BBC Radio 4's Today programme there was "clear agreement" in the coalition government that a permanent cap would be set next April, but the temporary limit was needed to prevent a "rush of applications" before then.
"Immigration into the UK has been good for us but uncontrolled immigration is not, so we need to bring in these controls," she said.
Immigration had been a "key issue" during the election campaign and it was important to "deliver on promises made," she added.
The problem for the government over capping the number of non-EU workers coming to Britain is the politics and the economics of immigration are at odds.
Politically, the Tory promise to reduce net immigration was one of its big vote winners and is a non negotiable for many party activists.
The business community - and Business Secretary Vince Cable - however are less than thrilled at curbs on their ability to recruit skilled staff.
There is also anxiety at the imposition of another tier of regulation and claims it runs counter to the coalition's desire to promote Britain as "Open for Business".
Ministers are now talking about a "flexible" approach and stress the cap is only one part of their plan for reducing net immigration.
Sources insist the policy is not about to be watered down but it seems compromise is in the air.
Businesses have warned that the cap could stop them from filling vacancies at times of high demand, and other critics say it could have a detrimental effect on higher education, which is reliant on income from foreign students.
Mr Cable said: "The new regime has to accommodate those concerns. It has to be implemented in a flexible way."
He also said he was confident the limit could be introduced without damaging the economic recovery.
Ms May is to announce the move in a written statement as she launches a consultation process for deciding the level of the permanent cap.
Immigration minister Damian Green said the "interim cap" was a step towards a permanent cap, to be introduced following consultation with public and private sector employers.
"We need to strike the right balance so that we can bring in the people that Britain needs but not at the rate we have had over the past decade that has given rise to so much tension," he told the BBC News Channel.
According to the BBC's Mark Easton, the latest official immigration figures available are for 2008 and suggest 258,000 EU and returning British citizens - about 48% - came to the UK out of a total of 538,000 immigrants.
A Labour Party spokesman said: "It seems that senior Tories are also doubtful about the proposals.
"The tough Australian-style points system introduced by Labour has already had a big impact on bringing down migrant numbers and closed the door to unskilled workers from outside the EU.
"We remain committed to an approach that will help our economy and which is tough but fair."