The document, which is marked "officially sensitive" and dated August 2017, lays out three stages to changing the UK's immigration policy. An initial phase, during which an immigration bill should be introduced, should be followed by an implementation phase of at least two years. The final phase will introduce the new rules.
Under the proposed new rules lower-skilled EU migrants would be given residency for a maximum of only two years, while those in high-skilled occupations would be allowed to work for three to five years.
"To be considered valuable to the country as a whole, immigration should benefit not just the migrants themselves but also make existing residents better off,” the paper said.
"There will be a fundamental shift in our policy in that the government will take a view on the economic and social needs of the country as regards migration, rather than leaving this decision entirely to EU citizens and their employers,” it said.
Immigration law expert Joanne Hennessy of Pinsent Masons, the law firm behind Out-Law.com, said: "Businesses are likely to be concerned about the impact this may have on the existing skills shortages in the UK and the ability to attract workers to the UK if they can only be guaranteed a short term stay here."
The paper stresses that the new rules will not affect Irish citizens. "UK and Irish nationals have specific rights to travel freely within the Common Travel Area and to live in each others' country. These arrangements ... will continue after our departure from the EU," it said.
EU citizens who became resident in the UK before a specific, if yet undetermined date, will be able to continue to like in the UK and apply for settled status. They will continue to have the right to access healthcare, social security and pensions.
However, these people will have to "identify themselves to us and get documentation to secure their new status in UK law after we leave," the document said.
All EU citizens would be required to show a passport to enter the UK, rather than the identity cards used by many, to "ensure the highest standards of security". Electronic pre-clearance procedures will also be put in place to minimise the need for checks at borders, it said.
The paper also outlines plans to change EU rules on the rights of extended family members to reside in the UK. The document says there is currently "virtually no limit on the distance of the relationship between the EU citizen and the family member. We propose to define family members as direct family members only, plus durable partners".
The document also proposes to end European court of justice protection for the rights of EU nationals to bring non-EU family members to Britain.
The Guardian has published the full 82-page document here.