Energy Secretary Ed Davey told a news conference in London it was a "historic" day.
He said the UK was facing a "looming energy crisis" in the next decade thanks to years of neglect and under-investment.
Much of coal and nuclear-generated energy will stop in the coming years.
"We have known for years this is coming, but no-one was willing to take tough decisions."
Mr Davey stressed the project included plans to cover the costs of de-commissioning, with the operators required to pay into a fund from day one.
More top news
Tony Blair could be made to stand trial for war crimes over the invasion of Iraq, Labour leadership frontrunner Jeremy Corbyn has said.
The number of fines handed out to hauliers found carrying illegal immigrants into the UK has more than tripled in the last three years.
The controversial extraction method has given some an economic lifeline but others say it has ruined the tranquility of the area.