Every adult in Britain will require a digital ID under plans to be set out by Sir Keir Starmer.
The prime minister is expected to announce his backing in principle for the scheme in a speech as early as Friday, in a ramping up of efforts to tackle illegal immigration.
The so-called "Brit card" would verify a citizen's right to live and work in the UK.
Anyone starting a new job would be required to show the card, which would then be checked against a central database of those entitled to work here.
At the moment, workers have to show at least one form of physical ID in the form of documents - but there are concerns within government that these can be faked.
French President Emmanuel Macron has repeatedly warned that the lack of ID cards in the UK acts as a major pull factor for Channel crossings, as migrants feel they are able to find work in the black economy.
In July, Labour peer Harriet Harman told Sky News that the black economy and ID cards would "make it more difficult for people to work illegally".
The plan will be subject to a consultation and would require legislation to be passed, before being rolled out.
The plan represents a shift in the government's position, as last year ministers ruled out the idea following an intervention from Tony Blair.
The former Labour prime minister has long been an advocate of digital ID and took steps to introduce a system that would begin as voluntary and could later become compulsory while in office.
However the rollout was scrapped after Labour was ejected from power in 2010.
Digital ID cards are opposed by civil liberties groups, who have expressed concerns around privacy.
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