Monaco-style Grands Prix events could be hosted on English roads under new laws coming into force on Monday.
They will allow motorsport promoters to apply for permission from local authorities to close public roads in England to stage races.
The government said the move “could be a real boost” to tourism.
The final decision on whether a race is safe to proceed would be made by councils, police and other local bodies.
Motoring fixtures from small-scale local events to international races, such as a city-based Grand Prix, could get the green light.
Transport minister Andrew Jones said: “This could be a real boost for the economies of an area.
“The examples would be in cycling. We had the Tour de France here, we had a Grand Depart in Yorkshire a couple of years ago and roads were closed as part of that event and thousands of people came to watch it.
“It had a huge impact, not just for boosting cycling in the UK, but for boosting tourism wherever it went.”
A public consultation in 2014 on changing the law to allow motor racing on English roads met with an “overwhelming positive” response, he added.
Mr Jones denied the new rules could send the wrong message when there is fierce debate over traffic pollution in England’s cities.
A spokesman for London Mayor Sadiq Khan said: “In considering whether to support a Grand Prix in London, the mayor would need to see what the impacts are on air pollution.”
Khan’s spokesman went on to say that the mayor was in discussion with Formula E over whether a race involving environmentally friendly electric-powered cars could be held on London’s streets.
Under the new laws, local authorities will be allowed to suspend the Road Traffic Act for authorised motorsports events, without the need for an individual act of parliament.
The new rules would mark a “seismic shift for UK motor sport,” according to the Motor Sports Association (MSA), which has campaigned to bring closed-road events to the UK.
“We can now take motorsport to the people, and in turn those local hosting communities have the opportunity to benefit from the economic boost that these events may provide,” said MSA chief executive Rob Jones.
Silverstone hosted the first Formula One world championship in 1950 and has been the permanent home of the British Grand Prix since 1987.
But many international cities host motor racing circuits held on temporarily closed public roads, like the Circuit de Monaco, Baku City Circuit in Azerbaijan and Marina Bay Street Circuit in Singapore.
Three times Formula One world champion Lewis Hamilton, in pole position for Sunday’s Chinese Grand Prix, has said a street circuit in Beijing would be “epic”.
Former Formula One world champion Nigel Mansell welcomed the new rules, calling them a “great move forward” for motorsport.