The NHS will have a legal duty to be honest about mistakes as part of an overhaul of the system in the wake of the Stafford Hospital scandal.
The move is part of a package of measures in England to put patients at the heart of the NHS, ministers said.
There will also be a new ratings system for hospitals and care homes, while changes to nurse training will be piloted.
It comes after the public inquiry claimed patients had been "betrayed".
The harrowing neglect and abuse at the hospital between 2005 to 2008 which led to needless deaths has already been well documented.
Statistics at the time showed there were between 400 and 1,200 more deaths than would be expected.
The £13m inquiry, published at the start of February, focused on why the problems were not picked up sooner.
It accused the NHS of putting corporate self-interest ahead of patients, concluding the failings went from the top to the bottom of the system.
In total, the report made 290 recommendations.
Ministers have not responded individually to each one.
But Health Secretary Jeremy Hunt said the response on Tuesday marked the start of a "fundamental change to the system".
"We cannot merely tinker around the edges - we need a radical overhaul with high quality care and compassion at its heart."
He said he wanted to create a culture of "zero harm" through the changes.
Key to this will be the new post of chief inspector of hospitals - announced immediately after the publication of the public inquiry - and the statutory duty of the NHS to be honest about mistakes, known as a duty of candour.
But the government said it would wait before deciding whether to make individual doctors and nurses criminally accountable for hiding mistakes as recommended by the inquiry as it was concerned about creating a "culture of fear".
The government has also stopped short of the inquiry's demand for a registration system for health care assistants.
Instead, it confirmed it will push ahead with a code of conduct and minimum training standards.
On training for nurses, ministers said there would be a pilot programme whereby nurses will have to work for up to a year as a healthcare assistant before getting NHS funding for their degree.
Meanwhile, managers who fail in their jobs will be barred from holding such positions in the future.
The ratings system, which will start being rolled out later this year, will be based on the Ofsted system used in schools.
Hospital and care homes will be given an outstanding, good, requiring improvement or poor rating.
However, in hospitals individual departments will be given their own rating as well to reflect the increased complexity of the organisations.
But shadow health secretary Andy Burnham said the culture of the NHS would not be changed unless staffing problems were resolved first.
"We will never get the right culture on our wards if they are understaffed and overstretched," Mr Burnham said.
Royal College of Nursing general secretary Peter Carter agreed staffing was an issue and said he was disappointed there would not be a registration system for healthcare assistants.
He also said he had concerns about the measures on nurse training, but added the the union was still "committed" to working with government to ensure a "patient-centred NHS becomes a reality".
But Don Redding, policy director of the patient group National Voices, felt the changes would make a difference, particularly the duty of candour.
"In cases where patients have been harmed or worse, both senior managers and their legal advisers have generally decided their first duty is to the interests of the trust. This new legal duty will rebalance that."
Mike Farrar, chief executive of the NHS Confederation, which represents health trusts, said: "The government has used this time to produce an overarching response rather than a something which tries to tick all the boxes.
"The response finds the right balance between external assurance measures and internal changes focused on transforming the NHS culture."
Robert Francis QC, who chaired the public inquiry, added: "Even though it is clear that it does not accept all my recommendations, the government's statement indicates its determination to make positive changes to the culture of the NHS."