All children in England will take the test at the end of Year 1.
The announcement follows the pilot, which took place in 300 schools this summer.
Research published today by the department found that 43 per cent of teachers said they had been able to identify children who had reading problems that they previously did not know about.
The study of the pilot, carried out by Sheffield Hallam University, also found that:
The department said that if the rollout of the test is as successful as the pilot, thousands more teachers will be able to identify children who need extra help with their reading.
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