Monday's announcement falls in line with the administration's attempts to curb legal immigration, and favor wealthier and more educated immigrants.
Here's what to know:
The rule applies to people who are seeking to come to or trying to remain in the United States. Notably, it'll affect people who are trying to obtain lawful permanent status, otherwise known as a green card.
The "public charge" provision dates back at least to the Immigration Act of 1882. Federal lawmakers at the time wanted to make sure that immigrants would be able to take care of themselves and not end up a public burden.
Under current regulations put in place in 1996, the term is defined as someone who is "primarily dependent" on government assistance, meaning it supplies more than half their income.
But it only counted cash benefits, such as Temporary Assistance for Needy Families or Supplemental Security Income from Social Security. The administration's new rule widens the definition of who is expected to be dependent on the government by including more benefit programs.
Immigration officials can take into account an applicant's financial resources, health, education, skills, family status and age. But few people are rejected on these relatively narrow grounds, experts said.
"It's totally changing the conception of what it means to be a public charge," said David Bier, immigration policy analyst at the libertarian CATO Institute.
The rule will effect people who receive most forms of Medicaid, food stamps and housing vouchers.
It doesn't include benefits such as emergency medical assistance, disaster relief, national school lunch programs, Children's Health Insurance Program (CHIP) and food pantries and homeless shelters.
The rule includes immigrants who use one or more designated public benefits for 12 months within a 36-month period. Each benefit is counted separately, meaning if two benefits are used in a month, it'll count as two months.
It's hard to know exactly how many people will be affected because it's largely subject to the discretion of the officer who will take into account whether someone is likely to become a public charge.
According to the Department of Homeland Security, however, the rule is expected to impact roughly 382,000 people seeking to adjust their immigration status. Immigration advocates, however, say millions of people could be affected by the regulation.
Immigration advocates have also argued that the rule goes beyond what Congress intended and would discriminate against those from poorer countries, keep families apart and prompt legal residents to forgo needed public aid, which could also impact their US citizen children.
"The rule reflects a dark vision of the United States -- as an unwelcoming nation that wants to keep out people who seek to join their family, work hard, and climb the economic ladder -- based on the erroneous assumption that they won't contribute to our communities, our economy, and our nation," said Robert Greenstein, president of the Center on Budget and Policy Priorities.
Undocumented immigrants are largely ineligible for public assistance so they generally would not be affected, unless an avenue opens up for them to apply for green cards or visas.
The regulation doesn't apply to benefits used by US citizen children, according to a US Citizenship and Immigration Services official.
There are exceptions to the rule, such as benefits received by active duty member of the military and their spouses and children; Medicaid for pregnant women and people under 21 years old; and emergency medical care.
The rule also doesn't impact refugees or asylum seekers, as well as certain trafficking victims, victims of domestic violence, among others.
The rule will take effect October 15. Until then, US Citizenship and Immigration Services is "continuing to work towards finalizing the processes and procedures that will be required to implement the final public charge rule," according to a USCIS official.
The rule will only apply to applications and petition on or after the effective date, according to the agency.
CNN's Tami Luhby and Tal Kopan contributed to this report.