The government and firms will continue to top up wages of workers who have not been able to return to the workplace full time due to the coronavirus.
The Job Support Scheme, which will replace the furlough scheme, will see workers get three quarters of their normal salaries for six months.
It aims to stop mass job cuts after the government introduced new measures to tackle a rise in coronavirus cases.
Chancellor Rishi Sunak said it was part of a wider “winter economy plan”.
Nearly three million workers – or 12% of the UK’s workforce – are currently on partial or full furlough leave, according to official figures. The current furlough scheme ends on 31 October.