Ministers have endorsed a revolution in exam technology by 2010 that will enable pupils to take certain modules of most exams on a computer.
Detailed plans will be unveiled next month by the Government and the Qualifications and Curriculum Authority.
Charles Clarke, the Education Secretary, asked the authority to come up with the blueprint for the future of on-screen testing.
It is expected that the QCA will suggest that pupils be given the choice of sitting at least one or two papers, or modules, of each GCSE subject on screen.
The electronically-based exams will be taken in school or college under supervision to ensure the security of the tests. Pupils would not have access to the internet.
But students are unlikely to be forced to sit on-screen exams and will have the option to undertake them in the traditional way.
Speaking at a conference in London on e-assessment, Martin Ripley, head of assessment policy at the QCA, said that the e-testing agenda had taken some very significant steps forward in the past two years.
In 2002, Mr Ripley presented a paper on the subject to Sir William Stubbs, the former QCA chairman. Sir William responded: "Martin, you live on a different planet to me."
The development of new electronic methods of assessment has been identified by Dr Ken Boston, the QCA's chief executive, as among the authority's top five priorities for 2004-05.
This year, the QCA is piloting an on-screen test in ICTthat is likely to be offered to 600,000 key stage 3 pupils by 2005.
But ministers and the regulator have expressed some reservations about how the changes could affect GCSEs and A-levels.
In particular, there are concerns that multiple-choice formats could come to dominate the examinations process. Some are also concerned that new e-test formats should not be easier or harder than traditional pen-and-paper exams.
Steps would also need to be taken to ensure schools have adequate technology in place to administer the exams.
But the QCA also sees potential benefits to computerisation. For example, video clips can be used in questions and the new tests could give teachers a more detailed breakdown of a pupil's strengths and weaknesses.
The new key stage 3 test in information and communications technology cost pound;21 million to develop. However, the E-assessment Question conference was told that the exam boards would be interested in the potential savings which computerised testing could bring.