The scheme, which was drawn up by Transport for London and 18 borough councils, will mean companies wishing to dig up roads will have to apply for a permit before they can begin.
Officials say permitting will allow them to coordinate the timing of works ensuring roads are dug up less frequently.
David Brown, Managing Director of Surface Transport, TfL, said: “Now the Government has given us the go ahead for the scheme, we can get the ball rolling and plan to introduce permitting as soon as possible. We will be continuing to work with the DfT on this, the Department’s proposed increase in Section 74 overstay charges, and a proposed lane rental scheme in London, all of which would further help smooth traffic flow across the Capital.”