Foreign governments will be prohibited from owning British newspapers and news magazines, the government said.
This follows criticism of the planned takeover of the Daily Telegraph and Spectator newspapers by UAE-backed investment firm Redbird IMI.
The government said the proposed legislation would “provide further protection for freedom of the press”.
A spokesperson for the UAE-funded organization said it was “very disappointed with today’s developments”.
Labor has indicated it will support the changes, which will be included in amendments to the new law to be debated next week.
Cross-party pressure on the Government to take action has increased, with the Government facing possible defeat in the House of Lords on Wednesday as colleagues called for urgent action.