The move is an attempt to reverse a trend that has seen the number of adoptions, and the number of children being placed for adoption, both fall in recent months.
A statement released by the Department for Education said government will seek to change legislation as soon as possible, "to make crystal clear that councils and courts must place children with the person best able to care for them right up until their 18th birthday – rather than with carers who can’t provide the support they need over the long term".
Education Secretary Nicky Morgan said: “Every single day a child spends waiting in care is a further delay to a life full of love and stability – and this simply isn’t good enough. We have a responsibility to transform the lives of our most vulnerable children, making sure they get the opportunities they deserve.
“That’s why we are changing the law on adoption to make sure decisions rightly prioritise children’s long-term stability and happiness, so that children are placed with their new family as quickly as possible, helping them fulfil their potential and get the very best start in life.”
The government has also announced £200m in funding over the next four years to support the development of regional adoption agencies, strengthen voluntary adoption agencies, increase the number of adoptions for harder to place children by continuing to pay the inter-agency fee, and to increase funding for the Adoption Support Fund each year.
Adoption UK chief executive Hugh Thornbery said the legislation and funding announcement is "extremely good news for all of those involved in trying to improve services for adoptive families and adopted children".
"It’s vital, when planning for permanence, that all the child’s needs are considered as we know from the experience of our members that many children require highly specialised and therapeutic parenting to overcome early traumatic experiences," he added.
"We encourage the government to give due consideration to the need for there to be the best possible assessments of children’s needs to assist the robust decision-making they have described.”
John Simmonds, director of policy, research and development at CoramBAAF, said it is essential that the reform that accompanies the new law rebuilds confidence in professionals and judges and they have the resources and support needed to make the right decisions.
"Changing the law is itself only one part of this," Simmonds added.
"Skills, knowledge and evidence are at the core and current reductions in public spending across the board do not facilitate this."
Over the last two years, numbers of children being placed for adoption have fallen by around 50 per cent.
This has begun to have an impact on the number of adoptions taking place. Figures published by the Adoption Leadership Board in November show that 1,140 children were adopted between April and June 2015, compared with 1,330 between October and December 2014, a fall of 14.3 per cent.
The drop in children being placed for adoption and the subsequent drop in the number of adoptions taking place are widely accepted to stem from a ruling made in September 2013 by Sir James Munby in the case Re B-S.
In the ruling, Munby criticised "sloppy practice" of social workers and said that local authorities must provide evidence that all alternatives to adoption had been considered before bringing a case to court.