The number of immigrants arriving in the country has "dropped significantly", according to new figures released Thursday morning.
Net migration into Britain has fallen by a third, according to fresh figures released. A net flow of 163,000 migrants came to the UK in the year to June 2012, down from 247,000 in the previous year, the Office for National Statistics (ONS) said.
But critics suggested that, in fact, immigration has been falling since 2007, and the sharp decline was fewer international students coming to study in the UK.
Sponsored visa applications rose 3% in the university sector, but fell 62%, 69% and 14% for further education, English language schools and independent schools respectively.
Prime Minister David Cameron and Home Secretary Theresa May aim to reduce net migration from non-EU countries to less than 100,000 before next election in 2015.
There was a "significant" decrease in the number of immigrants arriving from New Commonwealth countries, which includes African countries such as Botswana, Kenya and Malawi and Indian subcontinent countries such as Bangladesh, India and Pakistan,
The decline was driven by a drop in the number of immigrants coming to Britain, which fell from 589,000 to 515,000, while the number of migrants leaving the country rose from 342,000 to 352,000. Britons are emigrating from the UK at the fastest rate since late 2008.
Immigration Minister Mark Harper said: "Our tough reforms are having an impact in all the right places - we have tightened the routes where abuse was rife and overall numbers are down as a result.
"But sponsored student visa applications for our world-class university sector are up and the numbers of skilled people being sponsored by UK employers in sectors such as IT and science have also increased.
"We will continue to work hard to bring net migration down from the hundreds of thousands to the tens of thousands by the end of this Parliament and to create a selective immigration system that works in our national interest."
Some 117,000 immigrants from New Commonwealth countries arrived in the UK in the year to June, down 30% or 51,000 from 168,000 in the previous year.
A total of 62,000 immigrants arrived from countries which joined the EU in 2004, including Poland, the Czech Republic and Lithuania, down 27% or 24,000 from the previous year.
The most common reason given for migrating to Britain remains study, the ONS said, with 197,000 foreign students arriving in the period, down 17% or 42,000 from 239,000 in the previous year.
The number of visas issued fell 10% or 57,106 to 507,701 in the year ending December 2012 - the lowest 12-monthly total since comparable data was first published in 2005.
UK Border Agency officials will conduct interviews with more than 100,000 student visa applicants from "high-risk" countries and a "genuine entrepreneur" test has been introduced to tackle the rising number of foreign nationals attempting to enter Britain by fudging their bank accounts and setting up fake businesses.