Israel is to start construction of a security barrier along the 266km border with Egypt to stop the flow of illegal migrants.
The $270m barrier will run along two parts of the border, one close to the beach resort of Eilat and one by the Gaza Strip. It will take several years to construct.
The Egyptian security service said they had not been informed of the plan but said they would not oppose it if it was built entirely on Israeli soil.
Israeli Prime Minister Binyamin Netanyahu said: "I took the decision to close Israel's southern border to infiltrators and terrorists. This is a strategic decision to secure Israel's Jewish and democratic character.
“We cannot let tens of thousands of illegal workers infiltrate into Israel through the southern border and inundate our country with illegal aliens."
He added that Israel would continue to help refugees fleeing from persecution and conflict.
Israeli police estimate that up to 200 illegal immigrants attempt to enter Israel from Egypt every week, mostly from Eritrea, Sudan and Ethopia.