The maximum stake and prize money for AWP machines in pubs is set to rise on October 27.
The long-awaited increases mean that the maximum stake will increase from 30p to 50p and the maximum prize available will increase from £25 to £35. The changes will only apply to machines which currently offer a maximum jackpot of £25.
The pub trade had become increasingly frustrated at the government's failure to bring in the rises after a recommendation from gambling watchdog the Gaming Board - now known as the Gambling Commission.
Labour MP John Grogan had tabled an Early Day Motion, which 148 MPs signed, calling for the changes to be implemented.
Business In Sport and Leisure (BISL) welcomed today's announcement.
Brigid Simmonds, BISL's chief executive, said: "Working with the major trade associations who have an interest in this area, we convinced ministers and officials of the hardship which the industry was experiencing at this low stake, low prize end of the market, not only in the retail, but also in the manufacturing sector.
"All-Party support was a key factor, but also the commitment of industry to social responsibility."
The DCMS has also announced a new code of conduct designed to protect children and vulnerable people against gambling on fruit machines. It will mean that all machines display the GamCare helpline number; all machines have signs forbidding play by under 18s and there is supervision to stop underage players.
Richard Caborn, Minister for Sport, said: "We made it clear through the passage of the Gambling Bill that any changes to stakes and prizes needed to be connected with improved social responsibility and the introduction of tough new measures which support the principles of the Gambling Act to help keep gambling fair, crime free, and protect children and vulnerable people."