Smaller, less well-funded charities will find it easier to appeal against rulings from the Charity Commission with the creation of a new Charity Tribunal.
The tribunal is designed to offer charities a faster and cheaper alternative to challenging the commission's decisions than through the High Court, which has been the only recourse up until now.
Launching the tribunal, Phil Hope, minister for the third sector, said it would bring a "new era of justice" for charities.
Ministers also hope the tribunal will facilitate a new body of case law governing the charity sector. Because it has been costly and time consuming for charities to challenge the commission through the High Court it has been difficult to establish precedent in many areas.
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Mr Hope explained: "It will create an affordable recourse for charities to challenge legal decisions of the Charity Commission and will strengthen the legal framework for charities by building case law which has been seriously lacking because charities simply could not afford to bring cases before the High Court.
"This is testament to the government's commitment to supporting charities by providing the legal framework they need to operate effectively."
The Charity Commission is backing the tribunal, billing it as an important milestone for the third sector.
It means that once the Commission has reviewed a decision internally, charities and other people affected by the decision can have confidence that they will get an independent hearing at the Charity Tribunal," said chair Dame Suzi Leather.
"It is an important part of the Charities Act and we look forward to the challenges and opportunities its introduction will provide."