A government shake-up of the UK Border Agency (UKBA) looks set to include £10,000 fines per illegal worker hired and the naming of companies employing them on a special website.
Around 7,500 UKBA officers and staff throughout the country will be reorganised into 70-80 local immigration teams, with a 1,000 extra staff focused on enforcement.
The teams will track down illegal migrants, target firms that break the rules and gather intelligence, the government said.
Home secretary Jacqui Smith said: "When newcomers come here they enter into a deal with the UK - to work hard, play by the rules and earn their right to stay.
"The UK's immigration system is undergoing the biggest shake-up for a generation, and these changes will ensure our frontline officers can continue to implement these reforms, and meet the tough targets we have set the UK Border Agency."
Deporting foreign national prisoners will be a priority, the government said, with more than 5,000 removed by the end of 2008.
There will also be 5,000 operations to identify and penalise organisations that break UK immigration laws in 2008/9.
In addition, the UKBA is also set to work with fraud prevention body CIFAS, which will see the names and addresses of those deported or convicted of immigration offences added to the CIFAS database.
This will allow over 270 financial service, telecoms and utility companies, to assist them in tackling fraud, the government said.
Liberal Democrat home affairs spokesman Chris Huhne said: "It has taken ten years for this government to work out that the best way to tackle illegal immigration is by cracking down on rogue bosses.
"It is better late than never, but it does not say much for the urgency with which ministers are tackling our chaotic controls on immigration."