MPs will no longer get perks such as dinners on expenses under a deal to boost their pay to around £75,000.
The Independent Parliamentary Standards Authority (Ipsa) is also expected to curb gold-plated pensions to offset millions of pounds in extra salary.
The stage is set for a showdown on the issue of pay after all three main party leaders urged the regulator to show restraint as the country suffers austerity.
However, Ipsa chairman Sir Ian Kennedy has warned them against trying to block a hike from the current level of £66,000 insisting there is never a good time to tackle the issue of MPs’ remuneration.
The package being unveiled on Thursday is set to do away with the £15 expenses available for dinner when the House sits beyond 7.30pm saving the taxpayer hundreds of thousands of pounds a year.
There could also be tighter rules on using taxis, and restrictions on claiming running costs for second homes.
With downgrades to the existing final salary MP pension, the regulator is likely to be able to argue that the new deal is broadly cost neutral for the taxpayer.
But the prospect of politicians receiving an 11% pay rise in 2015, while increases across the rest of the public sector are capped at 1%, is certain to generate a backlash.
Ipsa which was handed responsibility for pay and pensions after decades of controversy over MPs making the decisions will put the proposals out for consultation.
However, without a change in the law, it retains the final say over the remuneration package.
The new arrangements are due to be confirmed in the autumn and come into force after the general election.