Changes introduced by the Children and Young People Act 2014, which was passed by the Scottish Parliament in February last year, but did not take effect until today (1 April), mean that when a young person in care reaches the age of 16 they will be given the option to stay for a further five years.
The legislation will also mean young people leaving care will be eligible to receive “aftercare support” up to the age of 26.
Acting minister for children and young people Fiona McLeod described the moment as "an important day" for both young people in care, and care leavers.
"Extra support and greater rights will ensure that every young person in care knows they are supported in a way that meets their needs while looked after and during their transition towards independent lives," she said.
“The key to supporting young people in care and helping them achieve their best will be listening to what they need and expect from their corporate parents.”
The changes were introduced following campaigning work by organisations that help children in care across Scotland, including Who Cares? Scotland, Barnardo’s, the Centre for Excellence for Looked After Children in Scotland, and Aberlour Child Care Trust.
Duncan Dunlop, chief executive of Who Cares? Scotland, described the legislation as “momentous”.
“Over two years ago Who Cares? Scotland, in coalition with Barnardo’s Scotland and Aberlour Child Care Trust, kick-started our Continue to Care campaign, along with 21 of Scotland’s care-experienced young people.
“Today we are united in congratulating the bravery of those 21 young people for sharing their stories and experiences.
“In doing so, they have changed Scotland’s care system forever.
Andy Elvin, chief executive of fostering and adoption charity Tact, said: "It is quite simply fantastic news that the Scottish Government has announced this initiative.
“All children in care deserve the opportunity to stay in their home until they are 21.
“It is particularly positive that Scotland has gone beyond England and extended this right to children in residential care and enshrined aftercare support as a right until age 26."
In England the government last year extended the age at which young people can receive support to remain in foster care to the age of 21, so-called Staying Put arrangements.
However young people can only remain in residential care until they are 18.
A study published in January this year put the cost of extending Staying Put provision to residential care at £76m.