The music and film industry will pay three-quarters of the costs of pursuing net pirates, with internet service providers paying the remaining quarter.
ISPA, which represents UK ISPs, said it was “disappointed” that it had to share the costs of implementing the controversial legislation.
The crackdown will see letters sent to those suspected of being net pirates.
The government also revealed that there will be no fee charged to consumers who want to appeal against the notifications.
It added a caveat though – if it receives large numbers of “unnecessary appeals” it reserves the right to introduce a “small fee” down the line.