Benefits claimants will be put through a rigorous medical assessment to see if they could be in a job under new plans.
Work and Pensions Secretary Peter Hain said he believed the "majority" of people on benefits could work if they are given the right support.
He promised to "rip up sick note Britain" by scrapping Incapacity Benefit and replacing it with a new Employment and Support Allowance.
Mr Hain said he believed 20,000 fewer people would move on to sickness benefits from next year as a result of the change.
He said: "I believe that the majority of people on benefits could work with the right support and training and the opportunity to go for a job.
"In the past, people going on to incapacity were just left there, written off, more likely to reach retirement age or to die than ever work again and, at its height, costing a staggering £15 billion a year."
The system had embedded the sick note into the "foundations of the British economy," Mr Hain said.
Mr Hain said the Government will help give claimants training and support to get them ready for work.
More than 100 major employers have signed up to a scheme which will give guaranteed job interviews and work trials to people on benefits.
Mr Hain said: "At any one time there are 660,000 vacancies so the jobs are out there. From now on continuing to receive a benefit will increasingly be linked to preparing for a job with a threat of sanctions for those that wilfully refuse to engage."
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