Britain's 2.5 million veterans are to be formally recognised with their own IDs to show they served in the armed forces.
Ex-military personnel will be issued with a new type of driving licence stamped with 'V'.
A separate card will be handed to those who do not drive, with the IDs expected to be rolled out from next year.
Speaking of Britain's former Royal Navy, Army and RAF servicemen and women, Prime Minister Theresa May said:
"Those who have served deserve recognition for their sacrifice throughout their lives and we will continue to make sure that they get it."
The plans were first mentioned by Tobias Ellwood, the minister responsible for defence personnel and veterans, in the Commons in October.
He said the ID option was part of Government plans to improve the information it keeps about ex-military personnel.
Mr Ellwood, who was in the Royal Green Jackets for five years, serving in Northern Ireland, Bosnia and Germany, told The Sun newspaper he was "delighted" about the introduction of the initiative.
He said: "As a former soldier, I am aware of the personal attachment with the service ID.
"Carried at all times, it becomes symbolic of the responsibility and there is a strange sense of loss when upon departing the Armed Forces, it is taken from you.
"I'm delighted this initiative, which sits in the Armed Forces Covenant, will help us all better recognise our veterans and their service to our country."
It is being reported that the cards will give veterans better access to specialist services such as priority healthcare, housing and retail discounts as well as giving a sense of pride for having served their country.