Jeremy Hunt plans to train up to 1,500 more doctors a year in a bid to make NHS England "self-sufficient" by the mid 2020s.
But the British Medical Association says the plans fall "far short of what is needed".
The Health Secretary's plans aim to combat the recruitment crisis for the NHS by reforming the current cap of 6,000 students training at medical schools per year to allow up to 25% more.
All doctors trained on the NHS, who at present cost £220,000 per medical graduate, will now also have to work there for a minimum of four years after graduation.
The cost of the move is estimated to be around £100 million by 2020 but is aimed to reduce the £1.2 billion a year spent on bringing in temporary medical staff and staff from overseas.
NHS hospitals rely heavily on foreign doctors, who currently make up 25% of the medical workforce, and spend £3.3 billion a year on agency staff, including locums.
"Jeremy Hunt has been Health Secretary for four years, and while it is welcome that he has finally admitted the Government has failed to train enough doctors to meet rising demand, this announcement falls far short of what is needed," said BMA council chairman Mark Porter.
"The Government's poor workforce planning has meant that the health service is currently facing huge and predictable staff shortages.
"We desperately need more doctors, particularly with the Government plans for further seven-day services, but it will take a decade for extra places at medical school to produce more doctors. This initiative will not stop the NHS from needing to recruit overseas staff."
Not everyone is negative towards the plans though.
Royal College of Physicians president Professor Jane Dacre said: "The RCP has long argued that rota gaps and staff shortages are the greatest threat to patient safety and have significantly contributed to low morale among junior doctors.
"The NHS needs more doctors, and this dramatic increase in medical school places will help relieve many of the pressures faced by the NHS in the long term, and support a more sustainable workforce."