By Verena Vogt
The Bank of England will start issuing plastic bank notes for the first time in 2016, when the new £5 note showing Sir Winston Churchill is launched.
The announcement follows a three-year research project into banknotes made from polymer rather than the traditional cotton paper.
The study found that the plastic notes last at least two-and-a-half times longer and are harder to counterfeit.
They also stay cleaner for longer than paper notes.
New plastic £10 note in 2017
A new £10 note which will be launched in 2017 and feature Jane Austen will also be issued in plastic.
All banknotes will keep their traditional look, with the Queen and a historical figure showing on each.
The bank consulted the public through a series of events, including at shopping centres, before the decision was made.
The consultation found that 87 per cent of respondents back the new polymer notes.
Mark Carney, governor of the Bank of England, said: "Ensuring trust and confidence in money is at the heart of what central banks do.
Evolution of bank notes
"Polymer notes are the next step in the evolution of bank note design to meet that objective.
"The quality of polymer notes is higher, they are more secure from counterfeiting, and they can be produced at a lower cost to the taxpayer and the environment."
Innovia Security is expected to win the contract for supplying the polymer material needed for the notes, which would lead to the creation of a production site in Cumbria.
The bank said that the new notes will fit just as easily into wallets as the traditional notes because they are thin and flexible.
Although they will be more expensive to produce, they will be cheaper in the long run because they are expected to last for much longer.
However, the bank stressed that it will not go ahead with the polymer notes if people are not comfortable with or have no confidence in using them.