New laws will be laid in parliament this week in a bid to stop waste criminals from exploiting loopholes.
There will be tougher sentences for those illegally dumping waste and advanced background checks to help put rogue operators out of business.
The new and tougher permit-based system will be brought into force in 2027, and require waste handlers to undergo identity, criminal record and technical checks before receiving a permit. They will also need to display their permit number in advertising, including on their vans, making it easier for the public to report unlicensed operators.
Those mishandling waste will now face up to five years in prison.
The Environment Agency will also get stronger powers to revoke permits and issue enforcement notices.
Waste Minister Mary Creagh said: "Waste cowboys have abused the system for too long, blighting our countryside and cities alike.
"Through our Waste Crime Action Plan, we’re introducing rigorous background checks for waste traders, shutting down corrupt operators and kicking them out of the industry for good.
"This is just one measure we’re introducing to stamp out waste crime, with law breakers now facing up to five years behind bars thanks to tougher penalties."
Philip Duffy, Chief Executive at the Environment Agency, said: "Waste crime is evolving, but so are we. These reforms give us the tools we need to fight back.
"With stronger powers to revoke permits and issue enforcement notices, we will move faster to shut down rogue operators and protect communities from the damage waste crime causes.
"The public are our eyes and ears. If you see fly-tipping or suspect an unlicensed operator, you must report it."