Gagging clauses which prevent departing NHS staff from speaking out about patient safety or care have been banned by the Government.
Such clauses have been placed in the contracts of hundreds of departing NHS staff, deterring potential whistleblowers from highlighting concerns about patient safety.
But Health Secretary Jeremy Hunt said the practice would end with immediate effect to help create a culture of "openness and transparency" across the NHS.
Staff leaving the health service will instead have a new legal right that allows them to speak out about issues in the public interest, such as death rates or poor care.
The move underlines the existing statutory right for anyone to breach a contractual gagging order in the public interest.
Tony Bertin, from lawyers Employment Relations, told Press Gazette: "Whistleblowers have a right to speak out in the public interest, especially when it concerns health and safety - but it will still take a brave individual to risk their severance payment by doing so."
The move comes in the wake of the Mid Staffordshire scandal, in which hundreds of patients are believed to have died because of poor care.
Hunt told the Daily Mail: "We need a culture of openness and transparency if we are going to stop another Mid Staffs from happening.
"The era of gagging NHS staff from raising their real worries about patient care must come to an end."
Almost £15 million was spent over three years on compromise agreements with staff leaving the NHS, the Mail said, of which 90per cent contained clauses to stop whistleblowers from speaking out.
Gary Walker, the former chief executive of United Lincolnshire Hospitals Trust, claimed he was sacked after raising concerns about patient safety.
He accepted a gagging clause as part of a settlement package but broke the terms to speak out last month about concerns over care.
Hunt said: "We are just going to ban them (gagging clauses). All these compromise agreements have to be approved by the Department for Health and the Treasury.
"We are now saying we won't approve any with a confidentiality clause that prevents people from speaking out about patient safety or patient care.
"We will make sure there is a specific clause in them saying that nothing in them can prevent people speaking out on issues such as patient care."
The Health Secretary said that a "culture of covering up problems" led to the Mid Staffordshire scandal, and that NHS staff who identify problems should be encouraged to come forward and speak out.
If their concerns are not heeded they should be given the ability to take them to the next level.
"That culture of openness and transparency is at the heart of what we are trying to do to drive up standards across the NHS," Mr Hunt said.
"This can only be part of our response to Mid Staffs. If we have a culture where whistleblowing is necessary then obviously something has gone wrong."