People from outside the EU moving to the UK to work or study will have to pay £50 extra for visas to help areas struggling to cope with immigration.
The £70m raised by the two-year scheme, announced by Communities Secretary Hazel Blears, will help fund more police support and translators.
Many councils have warned of the strain that new arrivals have put on services.
But critics say the cash will not have much effect and also warn that the move could stir anti-immigrant sentiments.
Ms Blears said it meant people coming to the UK to work or study would pay a levy on top of the basic cost of a visa.
Where there are impacts as a result of migrants coming in on the local community, we think it's fair that the migrants themselves should be asked to pay a contribution towards those impacts
She acknowledged that economic migrants already contributed to services through their taxes, but said the visa fund would provide extra money to "ease the transition" for areas which had seen a big influx in short periods of time.
"Where there are impacts as a result of migrants coming in on the local community, we think it's fair that the migrants themselves should be asked to pay a contribution towards those impacts to make sure that local people don't feel that they're really under strain," she said.
Ms Blears said the money would be allocated on a regional basis and that local councils, police forces and health authorities would be expected to work together to spend the funds for their area wisely.
One example was making sure people registered with their GP, to stop them using casualty departments for minor health issues.
The exact charge has not been confirmed but the department says it is expected to be about £50.
Initially it will be charged for two years only, as it is aimed at contributing towards the start-up costs of schemes which are expected to become "self sustaining".
These could include joint translation services for public authorities like the police and NHS bodies - which might currently be offering individual translation.
The vast majority of voters, including new citizens, actually want restrictions
Labour former minister
Rob Anderson, leader of the council in Slough - which has seen a large increase in migrants from the new EU countries - told the BBC: "It's a start, I don't think it can be the only thing that's done to try and help local authorities in the same position we are. We know the pressures that we are facing."
As unemployment rises and job vacancies fall, there are mounting concerns that migrants could become targets for social unrest.
Local authorities have said they need £250m extra to cope with migrant populations and helping them integrate.
Labour former minister Frank Field, who is co-chairman of the cross-party group on balanced migration, said most people wanted to see fewer migrants coming to Britain in the first place.
"The vast majority of voters, including new citizens, actually want restrictions," he said.
"Why doesn't the government address that issue instead of fiddling around believing that it can impose a tax which, even if it's successful, only raises a fraction of the cost of what integrating new arrivals means?"
Ms Blears said the new points-based system for non-EU immigration would ensure that only the people with skills the economy needed would come to the UK.
The Institute for Public Policy Research expressed concerns that the proposal could ignite anti-immigrant feelings.
Shadow communities and local government secretary, Caroline Spelman, said: "For a long time councils have been asking for recognition of the pressures put on local services by uncontrolled immigration, for them this announcement may well be too little too late.
"Rather than tackling the real pressures on local services I fear this announcement is designed to get a headline."
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