British nationals' unrestricted right to work and stay will be effectively scrapped on the last day of colonial rule, bringing them into line with other foreign nationals.
Currently, British nationals in Hong Kong can acquire the right to land after seven years' residency.
However, this right will be scrapped and replaced by unconditional stay terms.
Both mechanisms allow Britons to enter, live and work in Hong Kong without a visa. The former is a statutory right, while the latter is an administrative arrangement.
British citizens will be able to stay for six months without a visa, but will need one to study or work.
Secretary for Security Peter Lai Hing-ling said the Immigration (Amendment) Bill 1997 would take effect before the handover to help to clarify the rules and remove uncertainty.