New guidance unveiled by the Department for Transport will make it easier for local authorities to introduce the limit on the quietest roads.
The vast majority of rural roads are currently governed by a 60mph limit. But under this move motorists could face fines if they drive over 40mph.
The government announcement comes against a backdrop of the latest figures showing the first annual rise in road deaths and serious injuries in 17 years, with 1,901 people killed last year, a three per cent rise on 2010.
Rural roads present the highest risk to motorists and their passengers, accounting for 68 per cent of fatalities in 2010. Nearly half of these deaths took place on country roads with a 60 mph limit.
Successive Governments have wrestled with the problem of rural speed limits. Labour had considered a blanket reduction which would have brought the top speed down to 50 mph.
But the Coalition has adopted a different approach making it cheaper and easier for councils to bring the speed limit down.
Normally reducing the speed limit would require a local authority to put in a series of signs, which is expensive and time consuming.
The Government proposals, however, will allow them to designate quiet stretches of roads as 40mph zones.
This would normally only require one sign at the start of the zone and another when it ends. This is also seen as having the additional advantage of cutting road clutter.
It is similar to the approach used in towns and cities which have brought in 20mph zones in residential areas.
Since the last government encouraged their rapid expansion, that number has risen to around 2,000, 20mph zones in urban areas across the country.
Once a rarity they are now commonplace and a similar expansion is anticipated across rural communities following this latest move.
Road safety experts believe that the new limit would be largely self-enforcing, though police forces could send mobile units equipped with hand-held speed cameras to problem areas.
"The guidance issued for consultation today does not propose a blanket change to rural road speed limits," said Mike Penning, the road safety minister.
"40mph limits should be considered for sections of rural roads where there are many bends, junctions or accesses and speeds are already at 40mph or below."
A spokesman for the Chartered Institute of Highways and Transportation predicted the move would see an increase in the number of 40mph zones as councils look to protect local communities.
"The effectiveness of these zones will depend on driver perception, education and levels of enforcement."
Motoring groups, while not opposed to the proposals, did voice concern that drivers could fall foul of the new limits unless they were given clear information.
"Speed limits are already quite complicated and the guidance should not lead to wholesale changes which could increase confusion and more signage," said Paul Watters of the AA.
Stephen Glaister of the RAC Foundation was cautious. "I don't have a feel for how this would work in rural areas without repeated signs. When you drive in the countryside, it is very easy to forget what the speed limit is."