English cities could host a Monaco-style grand prix as new rules come into force allowing motorsports on closed public roads.
A public consultation showed the legislation had "overwhelming support", ministers said.
The changes, which come into force on Monday, pave the way for a wide variety of motoring fixtures to apply for permission to shut public highways in England, from small-scale local events to international races, such as a city-based grand prix.
Transport minister Andrew Jones said the move was strongly supported and could provide a major boost to local economies.
He said: "This could be a real boost for the economies of an area.
"The examples would be in cycling: we had the Tour de France here, we had a grand depart in Yorkshire a couple of years ago and roads were closed as part of that event and hundreds of thousands of people came to watch it.
"It had a huge impact, not just for boosting cycling in the UK but for boosting tourism wherever it went.
"I would hope we would see something comparable for motor sport."
Mr Jones said concerns about closing roads were understandable in major cities such as London, but insisted that councils would have the final say on any proposals brought forward by promoters.
He said: "We had a consultation on this idea last year and there were 6,000 responses and it was overwhelmingly positive.
"Of the councils who responded, they again were overwhelmingly positive.
"There are always concerns about closing roads, the impact upon a community, the impact upon a local economy.
"That's why the local highways authority, the council, are right at the heart of the decision making process.
"And through elected representatives local communities will be able to have their say as well."
Managing director of International Motor Sports Ltd, Ben Taylor, said the shift represented the conclusion of a seven-year campaign to alter the law in favour of the proposals.
He said: "This is a subject that has been doing the rounds in most sport for 30 years.
"We just thought we'd give it another push, so started in January 2010 and never really thought we'd get a successful conclusion on this, but here we are.
"It's a really exciting day for the sport."
Mr Taylor said the changes would allow England to match events in Europe, Ireland and the Isle of Man, where similar rules already allowed for motorsports on public roads.
Andrew Jones denied the changes could send the wrong message at a time when fierce debate raged over levels of air pollution across the UK.
He said: "Actually, motorsport development has been at the heart of developing more efficient engines, and that benefits everybody.
"So technological developments, either in vehicle efficiency or in road safety, have come through (motorsport innovations) into the main fleets that you or I may drive.
"The two are not incompatible, the two are in fact directly related."
Former Formula One world champion Nigel Mansell welcomed the new rules, and called them "a great move forward" for the sport.
He said: "I have seen first hand the very significant impact of motor sport on the economy of the Isle of Man and Jersey, so this is a great move forward for the sport and will bring visitors and pride to parts of the country that wish to stage such events.
"I am delighted that this government is embracing motorsport, which will assist the UK's world-leading position and improve the sport's ability to help provide opportunities and focus for young people."