The cost of playing the main National Lottery draw is to double to £2, but more winners will get a share of the prize pot.
Operator Camelot said the increase, which takes effect in the autumn, means players who have three correct numbers will win £25 instead of the current £10.
However, the prize for matching five numbers will drop by £500 to £1,000, while the reward for getting five numbers and the bonus number will halve to £50,000.
The winnings for matching four numbers will increase from £60 to £100.
The price rise is the first since the Lotto draw launched in 1994 and follows research which found that consumers "want more ways to win more money" from the game.
An average 800,000 players win prizes for matching three or four numbers each week, while around 800 players match five numbers or five plus the bonus.
The average Saturday jackpot will increase from around £4.1m to £5m and the Wednesday jackpot will increase from an estimated £2.2m to around £2.5m, while a new Lotto raffle will guarantee at least 50 winners £20,000 in each draw, Camelot (OTC BB: CAML - news) added.
Managing director Andy Duncan said: "Our players still love Lotto, but after 18 years they say they want more from it.
"We've spoken extensively with them to develop a re-energised game.
"The changes we'll be introducing in the autumn to rejuvenate Lotto will give them what they have asked for: £25 for matching three numbers, bigger jackpots and a brand new way to play and win one of 50 prizes of a guaranteed £20,000 on each and every draw."
Lotto rollover draws will also change, with the number of raffle prizes on offer increasing significantly with each roll of the jackpot.
Total National Lottery sales have increased by 35% since 2002, with the number of players growing by more than 12% in the last five years.
Players have also helped to raise more than £29bn for National Lottery Good Causes.