The British energy price ceiling for the protection of 11 million households with variable tariffs will be introduced by the regulator Ofgem on 1 January 2019.
The cap would collectively save customers around £ 1bn, while individual households save on average £ 76 a year, Ofgem says.
Those who are among the most expensive would save around £ 120 a year.
However, it has admitted that the ceiling may already be raised next April due to rising wholesale energy costs.
Ofgem hopes that its price ceiling, which will allow households to charge variable rates, will be weighed down and that consumers will not be overwhelmed collectively by £ 1 billion.
Ofgem Chief Executive Officer Dermot Nolan said: "From January 1st, the energy price cap will put an end to customers if their gas and electricity defaults are exceeded by up to £ 1 billion.
"Price caps will ensure that suppliers, whether energy costs go up or down, do not disparage their nest, and changes in energy prices will reflect the underlying costs of heating and lighting our homes."
The easing of budgets will be short-lived as Ofgem announced that the cap is expected to be raised next April as wholesale energy costs rose "significantly" over the past year and are continuing at the same pace.
At the weekend, we announced that all austerity budgets benefiting from the new energy price cap will be nullified by rising wholesale costs "within months".
Ofgem said the cap should initially be set at £ 1,137 per year for a typical binary customer who paid by direct debit.
Households are required to review their fees every two years as the ceiling is to be updated each year in April and October to reflect the recent estimated costs of electricity and gas supply, including wholesale energy costs.
The price cap alone does not guarantee the best deals.
Nolan added: "Consumers who want to cut their bills further should look for better energy supply, and once the cap is reached, we will continue our work to make it as easy as possible."
Consumer groups welcomed the news of the official start date for the cap.
Gillian Guy, Chief Executive of Citizens Advice, said, "This price cap finally provides the much-needed protection for loyal households on long-term outage rates that have been exploited too long."
However, Stephen Murray, energy expert at MoneySupermarket, warned that the cap was "unsustainable".
He said, "The cap will be reviewed in February if market forces are likely to grow significantly.
"That means we could look at three months and then long-term pain from 12 to 18 months for people who do nothing and regulators have their bills checked."
Ofgem's announcement on the launch date comes after the government received the legal powers to introduce the cap in July.
It has already limited bills by its protective tariff for four million prepaid households.
This was extended in February to one million more vulnerable consumers with bad defaults who already received the government's Warm Home Discount.
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