The current cap of £4,500 and the barrier that prevents employees from transferring their pension plans in and out of NEST will be removed.
The Government-back NEST will become the default scheme for many employers who are legally required to offer a workplace pension to employees under the policy of auto-enrolment.
Restrictions were placed on NEST in March 2012 when it was set up as a concession to the insurance companies against who it competes.
Pensions minister Steve Webb (pictured) said it was important for NEST to retain its focus on its target market of low earners unfamiliar with pension saving.
"With over 250,000 members already, it is clear that NEST is a success. Targeting low to moderate earners that the market has traditionally forgotten, NEST has innovated with its use of language and investment strategy and has ensured that everyone has access to quality pension provision," he said.
"That is why I am not making any changes until 2017, when auto-enrolment is fully rolled out. At this point I will lift the contribution limit so that NEST remains a force for good in the marketplace, driving up standards and best practice."
Unions, businesses and insurance companies, have welcomed the removal of restrictions. Head of Pensions Research Tom McPhail said the original decision to put caps on savings was a peculiar one.
"There is still a significant risk of a pensions capacity crunch over the next few years, a restricted NEST would only exacerbate this problem," McPhail said.
"It would have been better if the restrictions could be lifted even sooner but the Government is making this happen as soon as it realistically can."
TUC general secretary Frances O'Grady said the restrictions on NEST are bad for savers and put unnecessary burdens on employers.
"Any employer can now confidently choose NEST as a single supplier as the contribution limit will end just as full contributions are payable under the phased introduction of auto-enrolment.
"Despite the strong lobby to keep NEST restrictions from some commercial providers, the minister has come down on the side of consumers," O'Grady said.