GCSEs will be replaced by a new qualification called 'I levels', which will see the current A* to G grades scrapped in favour of numerical marks.
Under plans put forward by Ofqual, the exams regulator, the highest grade will be an 8 and the lowest will be a 1.
This will enable a higher grade to be added if necessary, so the whole grading system would not have to be re-done if it was decided there should be a greater distinction available to the top students.
Michael Gove, the Education Secretary, previously backed the creation of an English Baccalaureate Certificate under a new exam system operated by a single awarding body, but that plan has since been abandoned.
The aim of the I level - or Intermediate level - exams is to provide harder content for the pupils sitting them and greater differentiation among the highest-performing teenagers.
Their introduction in schools from September 2015 will mark the biggest shake-up of qualifications for 16 year-olds for a generation.
The last time such a major reform was brought in was in 1986, when the General Certificate of Secondary Education, a universal qualification, replaced the two-tier system of O-levels and CSEs aimed at different levels of academic ability.
The new changes, details of which are expected to be published imminently, will apply to qualifications in English, maths, physics, chemistry, biology, double science, history and geography.
Other subjects will not initially be included in the new system, meaning hundreds of thousands of Year 11 pupils will sit a combination of I levels and GCSEs until the reforms are completed.