Justice Secretary Chris Grayling announced the changes, which will see the introduction of a new, two-tier system
Police cautions are set to be replaced with a two-tier system that the Government said removed the “soft option”.
Lesser offenders will have to apologise to victims and make reparation, such as fixing damage or paying compensation.
More serious offenders will get a suspended prosecution and a fine or have to attend rehabilitation.
Justice Secretary Chris Grayling said: “Offenders will face prosecution if they fail to comply with conditions set by the police, so no one is allowed to get away with the soft option.”
Police in Staffordshire, West Yorkshire and Leicestershire will trial the system.
Last year 391,171 out-of-court orders were made, down from 522,133 in the year to March 2010.
Police said reform should help cut bureaucracy.
A Justice Ministry consultation last year found 71% wanted a simpler system.
