Junior health minister Jane Ellison said that an independent review of the evidence on plain packaging would be carried out by March.
Prime Minister David Cameron's government had in July postponed plans to force tobacco firms to use plain packaging,saying it was waiting to see the effects of a similar move in Australia.
The government was reported to be worried about the impact on jobs in the tobacco industry that any ban on branded packaging might have as Britain emerges from recession.
But ministers have now changed course by announcing the review. "We must do all we can to stop young people from taking up smoking in the first place if we are to reduce the smoking rates," Ellison told parliament.
"I believe the time is right to seek an independent view on whether the introduction of standardised packaging is likely to have an effect on public health. In particular, I want to know about the likely impact on young people."
Australia in December last year became the first country in the world to force tobacco firms to sell cigarettes in identical, olive-green packets bearing the same typeface and largely covered with graphic health warnings. Health charities have pushed hard for a similar move in Britain, saying colourful branded packets encourage young people to see smoking as a glamorous activity.
But tobacco companies have said a ban would have little impact on smoking levels and would lead to a rise in counterfeit cigarettes.
The opposition Labour party accused Cameron's Conservative-led government of ordering the review because it was set to lose a vote on plain packaging in the upper House of Lords next month.
"Only a government as shambolic as this one could now be u-turning on a u-turn," said Labour's health spokeswoman Luciana Berger. Standardised packaging makes cigarettes less attractive to young people. We should be legislating now, not delaying."
Cameron came under fire in July when the ban on branded packaging was postponed, with opposition lawmakers asking whether the decision was influenced by links between his chief party strategist and tobacco companies.
Lynton Crosby, the Australian strategist for Cameron's Conservative party, runs a public relations firm that has previously acted for tobacco firms opposed to the move in Australia. Cameron's official spokesman denied there was any link between Crosby and the delay.