Ministers confirmed a commitment made last year to phase out the use of coal-fired power stations by the middle of the next decade, in a consultation on how best to implement the move.
Analysis found there would be no risk to the security of electricity supplies from cutting out coal, which will save 124 million tonnes of carbon dioxide between 2016 and 2030, the consultation said.
The Government said it wants to give investors certainty over replacement capacity such as gas power, which is a fossil fuel but produces lower emissions than coal.
It also confirmed its commitment to spend £730 million a year on renewable electricity projects this parliament and announced a new auction of subsidy contracts worth £290 million a year.
The funding will result in enough renewable power from sources such as offshore wind to power a million homes and reduce carbon emissions by around 2.5 million tonnes a year from 2021/2022 onwards, ministers said.
Business and Energy Secretary Greg Clark said: "We're sending a clear signal that Britain is one of the best places in the world to invest in clean, flexible energy as we continue to upgrade our energy infrastructure.
"This is a key part of our upcoming industrial strategy, which will provide companies with the further support they need to innovate as we build a diverse energy system fit for the 21st century that is reliable while keeping bills down for our families and businesses."
The auction for renewable subsidies, which are paid for on consumer bills, are for technologies including offshore wind, large-scale anaerobic digestion, biomass with combined heat and power plants, wave, tidal stream and geothermal projects starting between 2021 and 2023.
Subsidies for offshore wind are expected to be between £100 and £105 per megawatt hour (MWh) of electricity, lower than previous payments for the technology and coming close to the £92.50/MWh being given to the new nuclear power plant at Hinkley Point.
On coal, the plans will allow ageing power plants to continue to generate electricity only if they can significantly cut greenhouse gases, for example by installing technology to capture and store their emissions.
Coal power is already in decline in the UK, falling from a 30% share of power generation in 2014 to 22% in 2015, and dropping to zero at times this year.
Ministers want more gas power plants to take over from coal as they produce lower emissions, and to build a "diverse" energy system with record investments in renewable technology and new nuclear power.
Under the Paris Agreement, the world's first comprehensive climate deal, countries including the UK have pledged to cut greenhouse gas emissions to net zero in the second half of the century.
Friends of the Earth climate campaigner Guy Shrubsole said: "Coal is a dirty, inefficient and climate-wrecking fuel that belongs in the past.
"The government's move to consult on its commitment to phase out coal is a good, positive development."
Paul Massara, chief executive of North Star Solar and former boss of RWE npower, said ending the coal era would speed up investment in new energy technology and called for development of smart grids, renewables and storage systems.
"The evidence now indicates that smart, flexible grids based on renewable electricity supplemented by demand shifting, storage and interconnection will deliver power cheaper than the old model with endless fossil fuel costs - and with far lower carbon emissions and related health issues, " he said.
Professor Hugh Montgomery, director for the Institute for Human Health and Performance, UCL, welcomed the phase-out on health grounds
"Burning coal in the UK is linked to at least 1,600 premature deaths, 68,000 additional days of medication and over 360,000 working days lost. This adds up to £3.1 billion in avoidable costs each year on an already over-stretched health budget.
"For these reasons alone, a coal phase-out is well overdue and would be welcomed from a medical perspective.
"We have many other far cleaner and equally affordable ways of generating energy, but only one chance to enjoy clean and healthy air."
Industry body RenewableUK's chief executive Hugh McNeal welcomed the announcement of funding for new renewable schemes including offshore wind.
He said: "This will enable our world-leading industry to deliver significant investment to the UK.
"The competitive auction process is continuing to drive down the cost of offshore wind energy at an unprecedented speed.
"British supply-chain companies are already seizing the massive economic opportunities offered by offshore wind - and there's great potential for further job creation by innovative companies throughout the UK as the industry continues to grow."
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