The Taleban successful banned opium production
"We issued a decree for the complete ban on the growth of poppies in Afghanistan and the trafficking of it in the form of drugs," Hamid Karzai, the country's interim prime minister, said.
The Taleban government, overthrown in a US-led war, had successfully banned poppy cultivation in 2000 and eliminated about 96% of the 2001 crop.
But after the Taleban fell, farmers quickly planted for the spring harvest, expecting the new government to be too weak to enforce a ban.
UN drug control authorities estimate Afghanistan was responsible for producing 75% of the world's opium and 80% of the heroin traded in Europe.
Logistical challenge
Mr Karzai originally banned poppy cultivation in January but, because of weak support from factions around the country, the order has gone largely unenforced.
Eradication would be a huge logistical challenge for the weak administration after it ruled out aerial herbicidal spraying as impractical.
No explanation was given on how the measures - which include rural employment projects and incentives to grow alternative crops - would be funded.
Afghanistan has appealed for international aid for such plans but a meeting of donor countries in Geneva on Wednesday failed to agree on funding, the UN's Afghanistan envoy Lakhdar Brahimi said.
Farmers tempted?
Mr Karzai also promised measures "that would enable the farmers to receive some assistance in return for the destruction of poppies".
The poppy crop is the main income source for tens of thousands of farmers, labourers and drug dealers.
From Monday, farmers would be offered $250 per 'jirib' of poppy crop, senior government adviser Ashraf Ghani Amatzai said.
The jirib is an Afghan measure equalling 2,000 square meters of land.
The offer amounts to about $500 an acre, a fraction of what farmers can earn from opium.
"Will people be unhappy? Absolutely," Mr Amatzai said.
"Some are going to make $17,000 per jirib" if they harvest their opium, he added.
Farmers can earn 10 times more an acre from poppies than wheat, and the flower requires less water, a key concern as Afghanistan's four-year drought continues.