The Home Office has unveiled the first prototype ID card, as it tries to build momentum towards the beginning of the scheme in November 2008 when the first cards will be issued to foreign nationals.
The document card contains an electronic chip which will store the holder's biometric details, including fingerprints and a digital facial image.
"ID cards for foreign nationals will replace old-fashioned paper documents, make it easier for employers and sponsors to check entitlement to work and study, and for the UK Border Agency to verify someone's identity," said home secretary Jacqui Smith.
Within three years, all foreign nationals applying for leave to enter or remain in the UK will be required to have a card
The government hopes around 90 per cent of foreign nationals in Britain will be covered by the scheme by 2014/15.
Earlier this month, the Identity and Passport Service announced that it had shortlisted CSC, Fujitsu and IBM for the "Application and Enrolment" part of the scheme which will replace passport application systems.
And IBM and Thales have been shortlisted for The "National Biometric Identity Service" programme which will replace existing biometric storage and matching systems.
The contracts are expected to be awarded in 2009.
But the Tories have reiterated their intention to scrap the ID cards plan should they get into power.
"ID cards are an expensive white elephant that risk making us less – not more safe. It is high time the government scrapped this ill-fated project," said shadow home secretary Dominic Grieve.
"Nearly two years ago, we put government and industry on notice that a Conservative government would abandon the scheme and that the government should design the contracts appropriately. If they have not acted on this to protect the British taxpayer, it is reckless in the extreme at a time of heightened economic uncertainty."