A new report recommends an end to the Direct Provision system by 2023.
The report by the Advisory Group on Direct Provision will form the basis of a plan to replace the current system, which will be published by the end of this year.
The Government says it will introduce inspections of centres, vulnerability assessments for applicants and legislation to ensure access to driving licences.
It will also reduce the time frame to allow asylum seekers to seek work from nine to six months.
The report has been welcomed by Amnesty International, but says it's just the first step.
The UN Refugee Agency (UNHCR) has also welcomed the report.
In a statement, the agency said the Government "should move ahead now with key measures to cut waiting times and establish an independent inspectorate to monitor compliance with binding higher standards in existing accommodation centres".
