Space ports could be set up and satellites launched from regions across the UK under new powers to be unveiled this week.
The Spaceflight Bill will also allow scientists to fly to the edge of space and conduct experiments in zero gravity, which could help develop vaccines and antibiotics, the Department for Transport (DfT) said.
Science minister Jo Johnson said the bill would "cement the UK's position as a world leader in this emerging market".
The first commercial flight from a UK space port could lift off by 2020 under the powers, the DfT said.
Mr Johnson said: "From the launch of Rosetta, the first spacecraft to orbit a comet, to Tim Peake's six months on the International Space Station, the UK's space sector has achieved phenomenal things in orbit and beyond.
"With this week's Spaceflight Bill launch, we will cement the UK's position as a world leader in this emerging market, giving us an opportunity to build on existing strengths in research and innovation."
Aviation minister Lord Ahmad said: "We have never launched a spaceflight before from this country. Our ambition is to allow for safe and competitive access to space from the UK, so we remain at the forefront of a new commercial space age."
The Bill will be unveiled in parliament this week.