Bosses in critical industries like energy, transport, health and water could see their organisations fined millions of pounds if they leave themselves vulnerable to cyber attack, the Government said.
New sector-specific regulators will assess critical organisations and will have the power to fine them up to £17 million for failing to put in place effective cyber security.
The move comes after Defence Secretary Gavin Williamson warned Russia could cause "thousands and thousands and thousands" of deaths in an attack on Britain's energy supply, speculating the threat could come from a cyber attack, undersea activity or a missile.
It follows the WannaCry ransomware attack which crippled parts of the NHS, which Britain blamed on the shadowy North Korean cyber crime syndicate known as the Lazarus Group.
Digital Minister Margot James said a simple, straightforward reporting system will be set up to make it easy to report cyber breaches and IT failures so they can be quickly identified and dealt with.
Threats such as power outages, hardware failures and environmental hazards will also be included.
Incidents would have to be reported to the regulator, which will assess whether appropriate security measures are in place.
It not, it will be able to issue legally-binding instructions to improve security and if appropriate it will impose fines, although these will be a last resort.
Ms James said: "Today we are setting out new and robust cyber security measures to help ensure the UK is the safest place in the world to live and be online.
"We want our essential services and infrastructure to be primed and ready to tackle cyber attacks and be resilient against major disruption to services.
"I encourage all public and private operators in these essential sectors to take action now and consult the National Cyber Security Centre's advice on how they can improve their cyber security."
NCSC CEO Ciaran Martin said: "Our new guidance will give clear advice on what organisations need to do to implement essential cyber security measures.
"Network and information systems give critical support to everyday activities, so it is absolutely vital that they are as secure as possible."