The paper version of the £5 banknote will be replaced in 2016 with ones made from polymer, a flexible plastic film.
At that time, more than one billion plastic notes will enter circulation.
The announcement came from the Bank of England which confirmed its plans to produce £5 and £10 notes in the plastic.
The £5 is to feature Sir Winston Churchill while the £10, available in 2017, will have Jane Austin.
A decision on issuing the £20 and £50 notes on polymer will follow in “due course”.
The use of polymer should save £100 million over the next ten years, a quarter of the production costs. It should also make the notes harder to forge.
Paper money, composed of cotton pulp, linen and other plant fibres, has been abandoned by more than 25 countries, including Canada, Australia, New Zealand, and Singapore.
