Drugs known as "legal highs" will have to be proved safe before they can be sold under a bill the Government has introduced to Parliament.
Associate Health Minister Peter Dunne says the legislation is "a complete game-changer" in the way party pills are treated.
"It's about moving from constantly playing catch-up with this industry on each new product to reversing the onus of proof - now they will have to prove every product is safe before it goes on sale."
Mr Dunne says it will clean up what has been a "highly irresponsible" industry.
He expects the law to be in place by August, when it will replace a temporary notices regime which has taken more than 50 products off the market.
Penalties under the bill include two years in jail and fines of up to $500,000.
Mr Dunne has previously said there will be rigorous testing procedures which could cost up to $2 million for each product.