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Much of the Palace, including the Queen's private apartments, will remain closed, however, and the Queen herself will not be at home. The Palace will open only during August and September, when she is at her Scottish residence, Balmoral.
The National Heritage Secretary, Peter Brooke, said it was hoped that the profits would pay for 70% of the £40 million cost of restoring Windsor Castle, damaged by fire last November.
The Labour Opposition spokeswoman, Ann Clwyd, however, described the proposals as a climbdown for Mr Brooke, who has until now said the government would pay for repairs.
There has been widespread public opposition to the use of taxpayers' money to fund the work, and an attempt to raise money through a public fund started after the fire has raised only £25,000.
The royal household hopes that about 400,000 visitors will come to Buckingham Palace, much of it designed by John Nash for George IV, during the eight weeks it will be open.
For the first time, the public will be able to see the State Apartments and their priceless collections of paintings, furniture and porcelain.
The route of the tour has yet to be determined, but visitors are expected to be allowed to see the main apartments, including the throne room, the state dining room and the 155 ft (47m) long picture gallery.
They will also be able to look into the famous balcony on which newly-wed royals traditionally kiss.
There has been some criticism of the entry fee, which is higher than for most other major London tourist attractions.
A Palace spokesman, however, described it as "reasonable" for seeing the treasures of the royal collection.
There are also concerns over the security risks posed by opening the Palace to visitors, as well as the effect of the huge increase in traffic along the Mall outside.
The Palace will open each summer for five years, after which the scheme will be reviewed.
Within a week, all advance group booking slots to visit Buckingham Palace had been filled for the next three years.
About 380,000 people visited the Palace in the first year. This figure rose above 400,000 for the next two years but then levelled off to about 300,000 a year ever since.
Despite the original decision to accept visitors only until 1997, the Palace has continued to open its doors even after the restoration of Windsor Castle was complete, and remains one of London's top tourist attractions.
A new company, the Royal Collection Trust, was set up to manage visitors to Buckingham Palace, Windsor Castle and Holyrood House in Edinburgh.
In 2001-2002, its income was £16.7 million.
Persistent criticism from tourism reviews of the quality of the Buckingham Palace tour, with some describing it as "sterile", dull and uninformative.
To counter this, the Trust has now opened the Palace ballroom as well as part of the gardens. It has also put £20 million into the development of the Queen's Gallery, which opened in 2001.
In August 2003 Prince Charles also allowed tourists to see his new London residence, Clarence House, the former home of the Queen Mother.
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