The UK is to end restrictions on the rights of Croatians to work in the country, saying the "cultural/social pull factor is limited".
At the moment Croatian nationals need Home Office permission to work in the UK, unless an exemption applies.
Croatia joined the EU in 2013, with the UK one of four members to restrict Croatians' access to the labour market.
Croatian nationals will have the same rights in the UK as other EU nationals under any final Brexit citizens deal.
The UK could have extended controls for two more years if there was clear evidence that removing them would lead to a "serious labour market disturbance".
The question of imposing restrictions on access to the UK labour market - basically meaning people have to register with the Home Office and work for a year before gaining full rights - has been a charged one since the UK's decision to be one of a handful of countries to decide not to impose them when eight ex-communist central and eastern European counties joined the EU in 2004.
Home Office minister Caroline Nokes said in a written statement to Parliament: "This decision has not been taken lightly, but after careful consideration, we have concluded that there is not enough evidence to satisfy the legal requirements to extend the controls for the final two-year period."
She said that circumstances were different to 2011 when the government decided to extend "transitional" controls five years after Romania and Bulgaria had joined the EU. She said that recent estimates suggest there are fewer than 10,000 Croatian nationals living in the UK.
Ms Nokes said: "The cultural/social network 'pull' factor is limited, particularly given the much larger Croatian diaspora size in other EU member states (e.g. Germany)."
She added: "We will not discriminate between nationals of the EU member states in our implementation of the Citizens' Rights deal. Croatian citizens will be able to apply for settled status on the same terms as all other EU citizens.
"We have been clear that we will take back control of immigration and our borders when we leave the EU, and we will put in place an immigration system which works in the best interests of the whole of the UK."