The Department for Children, Schools and Families said the review of sex lessons had identified "a need to challenge the perception that sex and relationships education happened in a 'moral vacuum' in schools and says that parents and schools can and should work together to decide how best topics should be taught."
It said updated guidance would also be produced covering the content of the PSHE curriculum, based on the existing non-statutory programme.
Lessons should be "age appropriate". In primary schools, Sir Jim Rose would look at how PSHE should best be delivered as part of his ongoing review of the curriculum.
Schools Minister Jim Knight explains the sex education changes
The new review of how to make PSHE compulsory will be led by a London head teacher, Sir Alasdair MacDonald.
Mr Knight told BBC News: "We are not suggesting that five and six-year-olds should be taught sex.
"What we are saying is we need to improve in particular the relationship education, improve the moral framework and moral understanding around which we then talk about sex later on in a child's education."
He said what schools would have to follow would be a high-level "programme of study". But it would still be up to schools to decide what to teach.
"Faith groups for example will want to produce supplementary guidance on top of our guidance, in order to say to their own schools ... how they should then deliver that programme of study in a way that's sympathetic to their moral beliefs, their faith beliefs in those schools."
The Catholic Education Service for England and Wales said it supported the priority given to establishing a "values context" for all sex and relationships teaching, the recognition of the importance of the role of parents, and the clear expectation that lessons would be shaped by Catholic teaching.
The chief executive of the sexual health charity Brook, Simon Blake, said the news that PSHE was to be a statutory part of the national curriculum was "absolutely brilliant".
He added: "Now, at last, we can put the systems in place to give teachers and others the training and support they need to work effectively in partnership with children, young people and their parents."
87% say sex and relationship lessons should be compulsory
The head of the Association of School and College Leaders (ASCL), John Dunford, has written to the government complaining that secondary schools have only just begun implementing major changes to the curriculum including highly regarded but non-statutory material on PSHE.
"In ASCL's view it would be extremely detrimental to make PSHE compulsory or to change the revised secondary curriculum orders in any way at this point," he wrote.
It was not just a subject on the timetable.
"It is part of the ethos of the school, helping to develop the young person in ways that schools deem most appropriate to their circumstances.
"It should not be the subject to further central prescription and certainly not compulsion."
The sex education teaching requirements placed on schools at present are limited.
In primary schools, sex education is covered as part of the science curriculum.
This tells children about the main body parts and explains that reproduction is one of the life processes common to all animals including humans.
In secondary school, again mainly through science lessons, children cover the human reproductive cycle, including adolescence, fertilisation and foetal development.
They may also learn - though there is no statutory requirement that they should - about relationship skills, rights and responsibilities and different types of relationships, contraception, pregnancy and sexually transmitted infections and risky behaviours.
In Wales, sex and relationship education is already part of the curriculum and it is a legal requirement in Northern Ireland.
There is no legal requirement in Scotland.
The UK Youth Parliament says four out of 10 young people say they received no relationship education at school.
Earlier this year, figures were released showing that the number of abortions performed in the UK on girls under 16 had risen by 10% in 2007.
A UK-wide poll commissioned by the BBC from NOP found that the majority of those questioned believed sex and relationship lessons should be compulsory in schools.
Of those, 64% believed lessons should not start until children are at least 11 years old.
Just over a third (36%) said they did not think children should learn about contraception until they were at least 13.
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