The level of net migration into the UK rose by 36% last year, Office for National Statistics figures show.
An estimated 572,000 people entered the UK on a long-term basis in the year to June 2010 while 346,000 emigrated.
Ministers want to reduce net migration levels, the difference between the two figures, to tens of thousands by 2015.
To help do this, the coalition plans to cap immigration from outside the European Union, a plan Labour says is "the worst of all worlds".
According to the ONS figures, net migration figures - which include asylum seekers and people who decide to stay longer than originally intended - have been rising steadily since December 2008.
While the number of people settling in the UK on a long-term basis has fallen slightly, this has offset by a sharp fall in the number leaving.
Figures released on Thursday also show that of migrants granted settlement, the number of asylum-related cases went up to 5,125, compared with 3,110 in 2009. The number of work-related cases was also up, rising 4% to 84,370 compared with 81,185 the previous year.
The number of foreign nationals given UK passports was down 4% to 195,130, but the figure remained higher than that seen in the years 2005 to 2007, the ONS said.
A total of 334,815 student visas were issued last year, down 2% on 2009, and asylum applications were down by more than a quarter to 17,790 last year, compared with 24,485 in 2009. This is the lowest level of asylum applications since 1989.
Immigration Minister Damian Green said: "These statistics reinforce once again why we are radically reforming the immigration system to bring net migration down to the tens of thousands by the end of this Parliament."
But Donna Covey, head of the Refugee Council, said she was "greatly concerned" more than one in four refusals in asylum cases were overturned at appeal.
"We know the government is looking at improving the decision-making process for asylum cases, but they must do so as a matter of urgency to ensure that those in need of protection are not returned to countries where their lives are at risk," she said.
Separate figures, published for the first time by the ONS, suggest 2009's economic slowdown had a dramatic impact on the number of people coming to England and Wales to work for less than 12 months.
An estimated 97,000 overseas residents visited the UK for short-term work-related purposes in the year to mid-2009, down from 162,000 the previous year - a reduction of 40%.
There was also a 33% drop in short-term work-related migration from Poland to England and Wales in 2009, the figures suggest.
The government hopes the non-EU immigration cap will have a big impact on reducing net migration levels.
This will be split into monthly allocations with a total of 4,200 available for the first month in April, with 1,500 each month after that - a total of 20,700, but high earners and people entering the country on company transfers will be exempt.
Labour has branded the cap "the worst of all worlds", saying it will harm scientific research and fail to limit immigration from within the EU, which the UK has little control over.
Research by pollsters Ipsos Mori suggests 75% of Britons believe immigration is currently a problem, with strong support for the government's plan to introduce an annual cap on the number of non-EU workers coming into the UK.
Some 57% support the cap, while 15% oppose it, suggests the poll, published earlier this week.
But it also revealed doubts about how effective the cap will be - 43% of those polled believe it will work, with 47% saying they think it will not be effective.
Ipsos Mori interviewed 1,004 adults face-to-face between 4 and 10 February.