Written prescription fees from vets will be capped at £21 and practices will have to publish price lists for services, the Competition and Markets Authority (CMA) said.
CMA also said a price comparison website would be introduced to help boost competition and drive down prices faced by consumers.
The measures come after an in-depth investigation by the watchdog, which found prices had been rising at nearly twice the rate of inflation.
The CMA said the reforms would start to come into force later this year.
Vets will also have to reveal if they are part of a large group, following concerns that ownership of practices was unclear.
Martin Coleman, chair of the independent inquiry group, said: “Today’s reforms will make a real difference to the millions of pet owners who want the best for their pets but struggle to find the practice, treatment and price that meets their needs.
“Too often, people are left in the dark about who owns their practice, treatment options and prices – even when facing bills running into thousands of pounds.
“Our measures mean it will be made clear to pet owners which practices are part of large groups, which are charging higher prices, and for the first time, vet businesses will be held to account by an independent regulator.”
The CMA found that more than 70% of pet owners bought long-term medication from their vet practice; as part of the reforms, pet owners must be told they can have a written prescription which could save them money.
Prescription fees are currently uncapped, but will be capped at £21 for the first medicine and at £12.50 for any additional medicines under the reforms.
Under other measures set out by the CMA, vet practices must publish a “comprehensive” price list for standard services – including consultations, common procedures, and cremation options.
A written estimate must be provided in advance for any treatment expected to cost £500 or more, including aftercare costs, plus an itemised bill. Emergencies are the only exception to this.
To help pet owners compare local practices, price and ownership information will be made available through the Royal College of Veterinary Surgeons’ “Find a Vet: service, which will share the data with third-party comparison sites.
