Cash transactions for metal at recycling yards will be outlawed under moves aimed at cracking down on cable theft.
The crime has plagued the railway industry for the past few years, disrupting train services across the country.
Amendments to the Legal Aid, Sentencing and Punishment of Offenders Act (Laspo) will close loopholes which have allowed criminals to make money from the theft of metal.
British Transport Police (BTP) said the new measures will "seriously curtail" the market for stolen goods.
Incidents of railway cable theft have dropped from more than 2,600 in 2011 to under 1,300 so far this year, but the figure is still high compared to past years.
Under the legal change, all cash transactions for metal at recycling yards in England and Wales will be outlawed.