The Socialist government in Madrid said on Monday that the programme - which will apply to immigrants who have work contracts and have been in the country for at least six months - is intended to end illegal employment and reduce the black economy.
Immigrants must provide proof of their registration with a local council from before 8 August 2004, proof they have no criminal record and a work contract of six months. Employers have until 7 May to provide the contracts.
But many of the immigrants facing the most difficult situations, such as those from Africa and from countries at war, will not be eligible since few are able to obtain the necessary paperwork proving their identity.
Spanish authorities on Saturday picked up 227 people off the Canary Islands, the largest single group of would-be immigrants to reach Spanish waters. Such groups are usually deported once their identities have been established.
Thousands attempt the perilous voyage to Spain from north and west Africa each year, with dozens paying with their lives.
About 2.6 million foreigners live in Spain, which has a population of 43.2 million, including more than a million illegal immigrants of whom one third are Ecuadorian, followed by Colombians, Romanians, Moroccans, Argentineans, Bulgarians and Ukrainians.
According to a government study, of the 17.24 million jobs in Spain 850,000 or 4.9% are occupied by immigrants with 34% of positions created last year taken by immigrants.
More than a million illegal
immigrants live in Spain
Under the measures announced last August, the socialist government of Jose Luis Rodriguez Zapatero also intends to promote legal immigration by delivering three-month visas, designed to give immigrants time to find work in Spain before applying for residence.
Residents of those countries which feed most of the illegal migration towards Spain will be given priority for visas.
The programme of normalisation will be dealt with by 52 immigration offices whose staff of 1639 employees will be increased by 130%.
The Spanish Commission for Refugee Aid (CEAR) has criticised the government scheme as neglecting those immigrants who have trouble getting hold of the necessary documents or who simply do not have a passport.
Thousands of immigrants have been lining up outside consular offices since the start of the year, some of them queuing round the clock, to obtain the necessary papers to enroll for the scheme.
CEAR said the government only wanted to grant legal status to "people capable of working who can pay for social security, they aren't regularising children, the elderly and people without work".
The conservative main opposition Popular Party has said the legalisation programme would result in "all the illegal immigrants in Europe coming to Spain".
Unskilled foreigners will find it harder to migrate to Britain under new proposals due to be announced on Monday that will also call for stricter screening of asylum seekers and tighter border controls.
On the eve of a much-trailed announcement of the new, tougher immigration and asylum proposals, British Prime Minister Tony Blair told BBC radio that what Britain needs is "a set of rules that allow people to come in when the country needs, but have strict controls that actually work".
Blair's government have drawn
up a five-year immigration plan
"Whether we should cut the number or increase it (the annual net inflow of people into Britain) depends on the country's need," he added.
The government has drawn up the five-year blueprint just three months before an expected general election in which immigration will be a major theme.
In addition, the new proposals will call for identity cards for everybody who migrates to Britain while also offering new measures to crack down on people-trafficking.
Clarke's announcement follows recent tough proposals by the main opposition Conservative Party to put an absolute cap on immigration numbers, and to limit asylum seekers by withdrawing from the 1951 UN Convention on Refugees.
Britain currently lets in 140,000 to 150,000 new immigrants a year.