A separate prosecuting body is being set up after the collapse of several high profile Customs & Excise trials.
Customs and Excise has seen a series of trials collapse
The new body was recommended in a report earlier this year into the failure of a series of cases involving £600m of alleged alcohol duty fraud.
More than 50 defendants had their convictions quashed.
The Attorney General, Lord Goldsmith, said on Friday the new Customs and Excise Prosecutions Office (CEPO) would start work in 2004.
The split mirrors changes made to police prosecutions in 1985. Until the creation of the Crown Prosecution Service (CPS) in that year the police handled trial prosecutions itself.
The recommendation for an independent prosecutor was made in a review by Mr Justice Butterfield.
The review was sparked by the collapse of the London City Bond warehouse prosecutions at Liverpool Crown Court in November 2002.
More than 50 defendants who were convicted in the course of 13 separate prosecutions had their convictions quashed, while no evidence was offered against a further 40.
Mr Justice Butterfield said Customs should keep the right to investigate cases.
But the prosecutions should be conducted by "lawyers who are wholly independent", he added.
Lord Goldsmith said rebuilding Customs and Excise's reputation "through concrete improvements to the prosecution process" is the "key challenge for CEPO in the coming years".
A spokeswoman for Customs and Excise denied previous trials had collapsed because prosecutions were handled in-house.
She told BBC News Online: "There were a number of very complex reasons for their failure and there was no evidence in the Butterfield Review that they failed as a consequence of a lack of integrity on behalf of individuals.
"The review made a number of recommendations and this is one of them we are preparing to introduce."