The changes unveiled in a new white paper presented in the House of Commons by UK Culture Secretary John Whittingdale include plans to trial a subscription-base model over the years as well as have more differentiated programming aimed at specific audiences, including ethnic minorities.
The minister told MPs that the government is "emphatically not saying the BBC should not be popular" but would introduce a new requirement to provide "distinctive content" rather than just pursue ratings.
The white paper was released as the BBC's charter comes up for renewal in December 2016, a process which has proved controversial with some fearful that the government would attempt to influence the running of the BBC.
"We will place a requirement to provide distinctive programmes and services at the heart of the BBC's core mission. Commissioning editors should ask consistently of new programming: 'Is this idea sufficiently innovative and high quality?' rather than simply 'How will it do in the ratings?'," Whittingdale said.
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Going forward, a new unitary board will govern the corporation, replacing the current BBC Trust. The BBC will have the ability to appoint the majority of its board, independent of government, and editorial decisions will be explicitly the responsibility of the director-general.
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But overall, Hall welcomed the white paper: "It delivers a mandate for the strong, creative BBC the public believe in. A BBC that will be good for the creative industries - and most importantly of all, for Britain."
The licence fee, paid by UK taxpayers towards the running of the BBC, will continue for at least 11 years and viewers will also need to pay it to use BBC's online service iPlayer.
However, a subscription-based model will also be trialled alongside.
"The government is clear that this would be for additional services only. Licence fee payers will not be asked to pay for 'top-up' services for anything they currently get," the white paper said.
The white paper will now be debated by MPs in the Autumn Parliament session before a new charter is drafted and signed for the next 11 years later this year.