The limit on contactless debit and credit cart payments will rise to £100, the Treasury has announced.
The increase will give a "huge boost" to the struggling retail sector, the government says, helping to support jobs and businesses.
By more than doubling the legal single contactless payment limit from £45 to £100, the government says it will be "easier than ever for consumers to pay for their shopping and supporting retailers across the UK".
In March 2020 the limit on contactless payments was increased from £30 to £45 amid the coronavirus pandemic, with authorities wanting to make it easier to minimise contact at the till.
The proportion of debit card payments using contactless has risen since the onset of Covid-19, from four out 10 in 2019 to six out of 10 in September 2020.
Chancellor Rishi Sunak said: "As we begin to open the UK economy and people return to the high street, the contactless limit increase will make it easier than ever before for people to pay for their shopping, providing a welcome boost to retail that will protect jobs and drive growth across the capital."
The change can be made because of Brexit, as the UK is no longer bound by the £45 cap on contactless payments which applies across the European Union.
While the law has already changed to allow payments up to £100, the banking industry is not expecting to implement the new limit until later this year, as firms will need to make the necessary systems changes.
The increase comes after the Financial Conduct Authority held a public consultation on contactless limits and recommended the change.
Despite the boost for cashless payments, the government says it is still committed to protecting the UK’s future cash system, with proposals including seeing cashback offered at shops without consumers having to make a purchase.