"There is growing evidence that wearing a face covering in an enclosed space helps protect individuals and those around them from coronavirus," a Downing Street spokesperson said.
"The Prime Minister has been clear that people should be wearing face coverings in shops and we will make this mandatory from July 24."
The new measures come as a report from the Academy of Medical Sciences warned that the UK must now prepare for a potential new wave of coronavirus infections in the winter more serious than the first, with a "reasonable worst-case scenario" of 119,900 Covid-related hospital deaths between September 2020 and June 2021.
The UK is one of the worst hit countries by coronavirus, with almost 45,000 fatalities, putting it third behind Brazil and the United States.
Report authors warn that Covid-19 is "more likely to spread in winter with people spending more time indoors and the virus able to survive longer in colder, darker winter conditions."
In the document, experts warn that "intense preparation" is urgently needed in the remaining summer months to reduce the risk of the health service being overwhelmed and to save lives this coming winter.
Scientists said that a combination of the possibility of a flu epidemic, a backlog of patients needing treatment and the disruption already created in the health system by Covid-19 posed a "serious risk to health in the UK."
Modeling suggested that there would be a peak in hospital admissions and deaths in January and February 2021 similar or worse than the first wave of the virus this spring, which would coincide with peak demand on the UK's health service.
"This is not a prediction, but it is a possibility," Professor Stephen Holgate, a respiratory specialist from University Hospital Southampton NHS Foundation Trust, who chaired the report, said in a statement.
He said the modeling suggested deaths could be higher with a new wave of Covid-19 this winter, "but the risk of this happening could be reduced if we take action immediately."
Minimizing community transmission, reducing transmission in hospitals and care homes, increasing testing capacity and vaccinating against flu were all needed to avoid such a scenario, the report said.
Last week, the head of Britain's national academy of sciences, the Royal Society, Venki Ramakrishnan said the UK was "way behind" many countries in terms of wearing masks. Scotland, Germany, Spain, Italy and Greece have already made it compulsory to wear face coverings inside shops.
Ramakrishnan added that not wearing a mask should be regarded as antisocial as drink driving and reasoned that there is a "growing body of evidence that wearing a mask will help protect others -- and might even protect you."
Earlier on Monday, UK Prime Minister Boris Johnson said it was "important" to wear a face covering in a confined space.
Johnson's comments came after senior government minister Michael Gove said Sunday that he does not believe the use of face masks should be enforced as a compulsory measure.
Downing Street's statement added that shop employees and retailers should encourage customers to comply, but enforcement will be carried out by the police.
Children under 11 and people with disabilities will be exempt. The regulations will indicate that those who fail to wear a mask can face a fine of up to £100 ($125).
Still, questions have been raised as to why face masks in shops have not been made compulsory as soon as possible, with fines being enforced from July 24.
In June, the World Health Organization updated its recommendations, calling for nations to encourage the general public to wear fabric masks in areas where there continues to be intense spread of the novel coronavirus -- and for all health workers and caregivers to wear medical masks throughout their shift while in clinical areas.
The US Centers for Disease Control and Prevention now says everyone "should wear a cloth face cover when they have to go out in public, for example to the grocery store or to pick up other necessities."
UK government guidance since May has advised the public to wear face coverings in enclosed public spaces where they may come into contact with people they wouldn't usually meet. Face masks have been mandatory on public transport in England since mid-June.
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