MSPs will take some responsibility for welfare for the first time when Holyrood returns from its summer break.
The UK Government said it will lay regulations in parliament on Thursday which will devolve some of the powers to MSPs from September 5.
That means when the Scottish Parliament sits again after recess, MSPs will be able to create new benefits in devolved areas and top up existing payments such as universal credit, tax credits and child benefit.
The new powers will also mean Scotland can make changes to the timings of payments for universal credit and alter employment support.
The Scottish Government have pledged to these and other powers in the latest Scotland Act “on a phased basis over the coming years” to improve the lives of people in Scotland.
While the UK Government had committed to the devolution of some welfare powers in the Scotland Act, the transfer of these powers is perhaps happening more quickly than had been expected.
SNP ministers are currently scheduled to bring forward a Social Security Bill, which will establish a new welfare agency for Scotland, during the 2016-17 parliamentary session.
Scottish secretary David Mundell said: “The transfer of a range of welfare powers is a key milestone in giving the Scottish Parliament the ability, for the first time, to legislate on benefits and create a welfare system tailored to local needs.
“This includes the ability to create entirely new welfare benefits – a very significant new power – and I look forward to seeing how the Scottish Government will use this.”
He added: “Crucially, these powers are being transferred while maintaining for people in Scotland the benefits of being part of a United Kingdom.
“Scotland has two governments, each with different but complementary responsibilities, and it is vital that we continue to work closely together in the national interest.”
The Scottish Government said that while it wished the new powers had gone further, they still represented “the most substantial change… since devolution”.
Cabinet secretary for the economy, jobs and fair work Keith Brown said: “The Scotland Act is the most substantial change to the powers of the parliament since devolution. while we are already working to use these powers as quickly as possible to improve people’s lives in Scotland, we are well aware of the scale of this task and our top priority is the safe and secure transfer of these powers to ensure anyone in receipt of benefits receives the right payment at the right time.”
“We will work closely with Westminster ministers to ensure the transfer of these powers takes place as smoothly and as quickly as possible. This is the start of a process and these changes will be implemented on a phased basis over the coming years.
“New powers on employability are among the most exciting of the new areas to be devolved as it gives Scotland the chance to create services that help long-term unemployed Scots find work and stay in work.
“We want to build a fairer social security system that supports the vulnerable in society and treats people with dignity and respect.
“Devolving powers over discretionary housing payments will allow us to have full control over the funding allocation for Scotland, in addition to the funding we are already providing to mitigate fully the negative impact of the bedroom tax.
“We have already committed to extending winter fuel payments to families with severely disabled children and reform assessments for disability benefits.”
Brown concluded: “While the Scotland Act does not go as far as we would wish, we will always use all the powers available to us in the best interests of Scotland.”
Other new powers coming to Holyrood will mean that from August 21, the Scottish Government will have the power to appoint a member of the board at the communications watchdog Ofcom.
MSPs will assume control over income tax rates and bands in Scotland from April 1 2017, with Scottish ministers becoming responsible for Air Passenger Duty in April 2018.