The announcement comes as the UK has set a tentative date of May 17 to relaunch international travel.
Travel destinations will be ranked green, amber or red according to virus risk, Downing Street said in a statement late Saturday, with the government to provide more details on Monday.
International travel is currently banned except for a handful of permitted reasons. This has created massive pent-up demand for summer holidays abroad.
"We are doing everything we can to enable the reopening of our country... as safely as possible," Prime Minister Boris Johnson said.
The government said the new system "will help ensure the UK's vaccine progress isn't jeopardised and provide clear guidance for travellers".
People heading to low-risk "green" countries will simply take a virus test before and after they travel, the government said.
But those going to amber or red countries will have to self-isolate or quarantine afterwards.
Currently people arriving in the UK from abroad are required to self-isolate for 10 days.
British nationals who arrive from a banned "red list" of high-risk countries face costly quarantine in government-approved hotels.
The government urged people not to book summer holidays, saying it was "too early to predict" which would be the green-lighted countries.
The government has announced it will allow a number of people to attend public events such as football matches from this month in trials of a virus certification system.
But it has not made clear whether it will issue "virus passports" for international travel, an idea backed by many tourism-dependent countries and airlines but opposed by more than 70 UK MPs.
The UK has already given out more than 31 million first vaccine doses and over 5 million second doses.
The rollout has far outstripped popular holiday destinations such as France.
This has boosted the public mood after more than 126,000 people died from the virus in the United Kingdom, the highest toll in Europe.
From Thursday, those living in England will be able to access two free rapid virus tests per week, a measure aimed at curbing symptom-free virus spread.
This will make such tests far more accessible than currently. "More cases will be detected, breaking chains of transmission and saving lives," the government said Monday.
Health Secretary Matt Hancock urged people to take up the offer, saying "getting back to normal hinges on us all getting tested regularly".
The lateral flow tests will be available at workplaces, community sites, schools and colleges. People will also be able to order delivery of the tests.
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