Nearly 100% of government transactions will be carried out online by 2014 if new targets announced today are met.
The government is accelerating plans to get all services online, and is hoping it will save £400m over three years.
The Putting the Frontline First report outlines how the government expects to free-up money for public services by streamlining back-office processes.
The government hopes that putting all services online will lead to better services and free-up staff to deal personally with individuals.
Prime minister Gordon Brown said in his speech to launch the report this morning: "I can also state that as a result of the work of Martha Lane Fox, our aim is - within the next five years - to shift the great majority of our large transactional services to become online only."
The report says: "We will accelerate plans to drive more rapid transition to online and personalised services."
Departments will be required to write strategies that show how transactions for each service will move online "as rapidly as possible, with a view to targeting near 100% by 2014". Each strategy must address funding, and how internet access will be extended to the digitally excluded population.
The strategies will then be used to produce a Digital Britain Roadmap, to be announced by the end of next year.
This roadmap will detail how major services like student loans, job seekers allowance, child tax credits will go online. A timetable for an online child benefit service will be in place by the Budget in 2010. All VAT returns and employer tax returns will be exclusively online by 2011, and there are plans to join up Directgov, NHSChoices and Business Link so they "provide a platform for departments to design and deliver personalised digital services".
The plans could see a large amount of work in store for local authorities, with the government encouraging them to process at least 80% of applications for school places online by 2011/12.