EasyJet customers who want to use overhead luggage lockers will have to buy more expensive tickets.
In a move which provoked criticism on social media, EasyJet said the changes to its luggage policy will start on 10 February.
Customers who don't buy the more expensive tickets will be restricted to putting a small carry-on bag under their seat.
EasyJet said the changes would improve punctuality.
But some customers reacted with dismay on Twitter, with one calling it an "absolutely terrible move".
"Like Ryanair, [they are] monetising every opportunity in a race to the bottom," they said.
'It is not right'
Another accused the airline of changing the conditions of their ticket after they had bought it.
"I imagine there is some small letter in the terms to allow you to do it, but it is not right is it?"
But some customers welcomed the move, saying it would free up storage space.
Currently, all customers are allowed to fly with a cabin bag measuring up to 56 x 45 x 25cm, enabling them to put small wheelie suitcases into overhead lockers.
But under the new rules, passengers who want to travel with an additional bag of this size as hand luggage must buy a more expensive ticket such as an Up Front or Extra Legroom seat. Prices range from £7.99 more expensive than a standard fare, up to £29.99 on longer flights.
People who also buy a more expensive Flexi fare or are members of the carrier's frequent flyer scheme will also continue to be allowed to take one small and one large item of hand luggage with them, subject to space on board.
EasyJet customers with an existing booking for travel from February 10 who do not want to pay more will be able to check in a larger cabin bag in the aircraft hold free of charge.
Robert Carey, chief commercial and customer officer for EasyJet said: "Punctuality is important to our customers and we know that if they have their bags placed into the hold at the gate due to the limited space onboard this can cause flight delays, and it can be frustrating for them too.
"Our new policy will improve boarding and punctuality for everyone, as well as give our customers certainty of what they will have with them onboard."
EasyJet previously used its luggage allowance to differentiate it from competitors.
Ryanair limits passengers to one small item of hand luggage without an extra fee, while British Airways' cheapest fares include one large and one small item of hand luggage.
Airlines have been hit hard by coronavirus crisis travel restrictions, and have been looking for ways to cut costs.
In November, EasyJet reported its first annual loss in the airline's 25-year history.
The airline made a loss of £1.27bn for the year to 30 September as revenues more than halved.
EasyJet expects to fly at just 20% of normal capacity into next year.
A spokesperson said the change in baggage allowance had been under consideration since before the pandemic.