For the first time since 2008-09, net migration levels to the UK have fallen significantly in the past year, mainly due to a dip in the number of foreigners studying in the country, indicating that Prime Minister David Cameron government's tough immigration policy was taking effect.
Net migration - the balance between the number of people who come to live in Britain for the long-term and the number who are leaving - fell from 242,000 to 183,000 in the year to March.
The reduction was principally because of a fall in the number of foreign nationals studying in the country, the BBC reported.
The UK government led by Prime Minister David Cameron wants to reduce the annual figure to the tens of thousands.
The Conservatives made reducing net migration a key part of their immigration policy while in opposition although totals actually rose by more than 20 per cent in 2010-11.
But provisional data released by the Office for National Statistics (ONS) indicates that net migration in 2011-2012 fell to below 200,000 for the first time since 2008-2009.
Over that period, inward migration to the UK fell by 42,000 to 536,000 - with the number of non-EU nationals settling in the UK falling from 317,000 to 296,000.
The ONS said the fall was "largely due" to a drop in the number of foreign students despite an increase in the number of arrivals from China - the UK's largest overseas student market.
"The recent falls for work and study are likely in part to be due to policy changes, which came into effect in December 2010 and April 2011," the ONS said.
At the same time, the number of people choosing to leave the UK rose from 108,000 to 127,000.
Home Office minister Mark Harper said the latest figures showed the government was bringing immigration "back under control".
"Our tough policies are taking effect and this marks a significant step towards bringing net migration down from the hundreds of thousands to the tens of thousands by the end of this Parliament," he said.
"At the same time, we continue to attract the brightest and best: these figures show that there has been a small increase in the number of sponsored student visa applications for the university sector."
The net migration target has caused some tension within the ruling coalition, with Lib Dems and some Tories - including Mayor of London Boris Johnson - believing it risks send the wrong signals to foreign students and hampering the economic recovery.
Further, there are warnings that any fall in net migration driven by lower student numbers could come at a "significant economic cost", the report said.