Business Secretary John Hutton told legislators that nuclear power "should have a role to play in this country's future energy mix, alongside other low-carbon sources."
He said nuclear energy was a "tried and tested, safe and secure" source of power.
Hutton said the new plants would be paid for by private energy companies, not the government, and that most would be built on the sites of existing stations.
"I am inviting energy companies today to bring forward plans to build and operate new nuclear power stations," he said.
Environmental groups condemned the decision, saying nuclear power was dangerous and would divert resources from developing renewable energy sources.
"We need energy efficiency, cleaner use of fossil fuels, renewables and state of the art decentralized power stations like those in Scandinavia.
That's the way to defeat climate change and ensure energy security," said John Sauven, executive director of Greenpeace.
Nuclear power stations produce around 20 per cent of Britain's electricity, but all but one are due to close by 2023.
Hutton said he hoped the first of the new plants would be up and running "well before" 2020.
He said there would be no cap on the amount of energy that could be generated from nuclear power, but said the government would invest in developing other renewable energy sources.
The government has promised to cut emissions of environmentally damaging greenhouse gases by 60 per cent of 1990 levels by 2050, and sees nuclear power as part of a mix of clean and renewable energy sources that includes wave and wind power.
In making the announcement, Prime Minister Gordon Brown's government came down firmly on the pro-nuclear side of a debate that has divided opinion in Britain and across Europe.
Hutton argued that atomic energy was a boon both for the environment and for national security. Britain will move from producing most of its own energy to having to import much of its oil and gas by 2020, and the government has warned of the risk of becoming reliant on imports from less stable parts of the world.
"Set against the challenges of climate change and security of supply, the evidence in support of new nuclear power stations is compelling," Hutton said.